Legislature(2007 - 2008)SENATE FINANCE 532

04/08/2008 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 212 MEDICAL ASSISTANCE ELIGIBILITY TELECONFERENCED
Moved SB 212 Out of Committee
+= SB 8 MENTAL HEALTH PATIENT RIGHTS:STAFF GENDER TELECONFERENCED
Moved CSSB 8(FIN) Out of Committee
+ HB 2 VOCATIONAL EDUC ACCOUNT TELECONFERENCED
Scheduled But Not Heard
+ HB 147 TOURISM CONTRACT: STATE FUNDS AND MATCH TELECONFERENCED
Heard & Held
+= HB 166 CONTRIBUTIONS FROM PERM. FUND DIVIDENDS TELECONFERENCED
Moved SCS CSHB 166(FIN) Out of Committee
+ HB 289 EMPLOYMENT TAX EXEMPTION: SPILL RESPONSE TELECONFERENCED
Scheduled But Not Heard
+ HB 307 ASSAULTS: REPEAT OFFENDERS TELECONFERENCED
Scheduled But Not Heard
+ HB 406 CONTRACTS FOR PREPARATION OF BALLOTS TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  SENATE FINANCE COMMITTEE                                                                                      
                       April 8, 2008                                                                                            
                         9:44 a.m.                                                                                              
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stedman called the Senate  Finance Committee meeting                                                                   
to order at 9:44:02 AM.                                                                                                       
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
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                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Senator Bettye  Davis; Tom  Obermeyer, Staff, Senator  Davis;                                                                   
Angela  Listan;  Gus  Marx,  Grants   Manager,  Juneau  Youth                                                                   
Services;  Jeff  Jessee,  Chief   Executive  Officer,  Alaska                                                                   
Mental   Health  Trust   Authority;   Pete  Fellmen,   Staff,                                                                   
Representative   John   Harris;  Jerry   Burnett,   Director,                                                                   
Division of  Administrative Services, Department  of Revenue;                                                                   
Jeff  Park,   Vice  President,   Rasmussen  Foundation   Kaci                                                                   
Schroeder,  Staff,  Representative  Thomas;  Debbie  Richter,                                                                   
Director,   Dividend  Division;   Jerry  Burnett,   Director,                                                                   
Division of Administrative Services, Department of Revenue                                                                      
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Steve  Horn,  Executive Director,  Alaska  Behavioral  Health                                                                   
Association; Jerry  Fuller, Medicare Director,  Department of                                                                   
Health  and Social  Services; Brenda  Moore, Member,  Medical                                                                   
Health  Board   and  Counselor,  Suicide   Prevention;  Naomi                                                                   
Tigner,  Alaska  Association   for  Homes  for  Children  and                                                                   
Presbyterian Hospitality House;  Rod Betit, President, Alaska                                                                   
State  Hospital  Nursing Home  Association;  Lawrence  Weiss,                                                                   
Executive Director,  Alaska Center  for Public Policy;  Geran                                                                   
Tarr,  Alliance  for  Reproductive  Justice;  Brett  Carlson,                                                                   
Volunteer  Chair, Alaska  Travel  Industry Association;  Mike                                                                   
Walsh, Vice President, 4 Acre Group                                                                                             
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 8      "An Act relating to a mental health patient's                                                                         
          right  to  choose  the  gender  of  hospital  staff                                                                   
          providing  intimate   care  to  the  mental  health                                                                   
          patient  and to  the  duties of  hospital staff  in                                                                   
          caring   for  patients   receiving  mental   health                                                                   
          treatment."                                                                                                           
                                                                                                                                
          CSSB 8 (FIN) was REPORTED out of Committee with no                                                                    
          recommendations  and accompanying  new zero  fiscal                                                                   
          notes  from the Department  of Corrections  and the                                                                   
         Department of Health and Social services.                                                                              
                                                                                                                                
SB 212    "An Act relating to eligibility requirements for                                                                      
          medical   assistance  for   certain  children   and                                                                   
          pregnant  women;  and  providing for  an  effective                                                                   
          date."                                                                                                                
                                                                                                                                
          SB 212 was REPORTED out of Committee with no                                                                          
          recommendations  and three accompanying  previously                                                                   
          published  fiscal  notes  from  the  Department  of                                                                   
          Health and Social Services.                                                                                           
                                                                                                                                
HB 2      "An Act relating to the vocational education                                                                          
          account and  appropriations from that  account; and                                                                   
          providing for an effective date."                                                                                     
                                                                                                                                
          HB 2 was SCHEDULED but NOT HEARD.                                                                                     
                                                                                                                                
CSHB 147(RLS)                                                                                                                   
                                                                                                                                
          "An Act relating to  matching funds and state money                                                                   
          for  state tourism marketing  contracts with  trade                                                                   
          associations;   and  providing  for   an  effective                                                                   
          date."                                                                                                                
                                                                                                                                
          CSHB 147 (RLS) was HEARD  and HELD in Committee for                                                                   
          further consideration.                                                                                                
                                                                                                                                
CS HB 166(FIN)                                                                                                                  
                                                                                                                                
          "An  Act relating to  contributions from  permanent                                                                   
          fund   dividends  to   community  foundations,   to                                                                   
          certain  educational organizations, and  to certain                                                                   
          other charitable  organizations; and  providing for                                                                   
          an effective date."                                                                                                   
                                                                                                                                
          SCS CSHB  166 (FIN)  was REPORTED out  of Committee                                                                   
          with  no recommendations  and  an accompanying  new                                                                   
          fiscal note from the Department of Revenue.                                                                           
                                                                                                                                
CSHB 289(FSH)                                                                                                                   
                                                                                                                                
          "An   Act    exempting   employers    from   paying                                                                   
          unemployment  tax for  temporary services  provided                                                                   
          by  fishing  vessel   crewmembers  and  related  to                                                                   
          emergency   oil   spill   training   and   response                                                                   
          activities; and providing for an effective date."                                                                     
                                                                                                                                
          CSHB 289 (FSH) was SCHEDULED by NOT HEARD.                                                                            
                                                                                                                                
CSHB 307(FIN)                                                                                                                   
                                                                                                                                
          "An Act relating to penalizing certain misdemeanor                                                                    
          domestic violence assaults as felonies."                                                                              
                                                                                                                                
          CSHB 307 (FIN) was SCHEDULED but NOT HEARD.                                                                           
                                                                                                                                
CSHB 406(STA)                                                                                                                   
                                                                                                                                
          "An Act relating to contracts for the preparation                                                                     
          of election ballots."                                                                                                 
                                                                                                                                
          CSHB 406 (STA) was SCHEDULED but NOT HEARD.                                                                           
                                                                                                                                
9:44:09 AM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 2                                                                                                              
                                                                                                                                
     "An Act relating to the vocational education account                                                                       
     and appropriations from that account; and providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
     HB 2 was SCHEDULED but the not HEARD.                                                                                      
                                                                                                                                
Co-Chair Stedman  reviewed SB  8 for mental health  patient's                                                                   
rights, first  heard in Committee  February 6, 2008.  At that                                                                   
meeting, the  Committee adopted Committee  Substitute Version                                                                   
E changing  the age of  a patient's right  to request  a care                                                                   
provider by gender, from sixteen to eighteen years.                                                                             
                                                                                                                                
9:46:48 AM                                                                                                                    
                                                                                                                                
SENATE BILL NO. 8                                                                                                             
                                                                                                                                
     "An Act relating  to a mental health patient's  right to                                                                   
     choose the  gender of hospital staff  providing intimate                                                                   
     care to the  mental health patient and to  the duties of                                                                   
     hospital staff  in caring for patients  receiving mental                                                                   
     health treatment."                                                                                                         
                                                                                                                                
SENATOR  BETTYE DAVIS,  bill sponsor,  thanked the  Committee                                                                   
for  hearing   the  bill  and   declared  the  bill   had  no                                                                   
opposition.                                                                                                                     
                                                                                                                                
Co-Chair  Hoffman Moved  to Report  CSSB 8  out of  Committee                                                                   
with  individual  recommendations   and  accompanying  fiscal                                                                   
notes. There being NO OBJECTION, it was so ordered.                                                                             
                                                                                                                                
CSSB  8  (FIN)   was  REPORTED  out  of  Committee   with  no                                                                   
recommendations and  accompanying new zero fiscal  notes from                                                                   
the Department  of Corrections  and the Department  of Health                                                                   
and Social services.                                                                                                            
                                                                                                                                
9:49:01 AM                                                                                                                    
                                                                                                                                
SENATE BILL NO. 212                                                                                                           
"An  Act relating  to  eligibility requirements  for  medical                                                                   
assistance  for  certain  children and  pregnant  women;  and                                                                   
providing for an effective date."                                                                                               
                                                                                                                                
9:49:16 AM                                                                                                                    
                                                                                                                                
TOM OBERMEYER,  STAFF, SENATOR  DAVIS, presented  an overview                                                                   
of the bill by reading the Sponsor Statement:                                                                                   
                                                                                                                                
     SB 212  reinstates the  qualifying income standards  for                                                                   
     children and pregnant women  receiving Medicaid benefits                                                                   
     under  the  Denali  KidCare  (DKC)  program  to  poverty                                                                   
     guidelines  used  when the  program  was established  in                                                                   
     1997  at  200%  Federal   Poverty  Guideline  (FPG)  for                                                                   
     Alaska.  Reduced   and  frozen   at  175%  FPG   by  the                                                                   
     Legislature in  2003, the equivalent income  limits were                                                                   
     reduced in the following  four years to 154% by the time                                                                   
     SB27 was implemented to reinstate  current levels of the                                                                   
     FPG at  175% in 2007.  Children and pregnant  women with                                                                   
     household incomes  between 176% and 200%  FPG still have                                                                   
     not   regained   eligibility.   SB212   also   increases                                                                   
     allowable  premiums or  cost-sharing  by families  whose                                                                   
     incomes are between 150%-200% FPG.                                                                                         
                                                                                                                                
     The fiscal  notes anticipate 2% enrollment  growth after                                                                   
     2009 and an  annual cost increase of 8.6%,  allowing for                                                                   
     5%   medical   inflation   in   Alaska.   The   $249,600                                                                   
     appropriation  required for  2009 does  not reflect  the                                                                   
     indirect  savings  by fewer  emergency  room visits  and                                                                   
     many  avoided long-term  illnesses  for SCHIP  children.                                                                   
     The  addition  of one  employee  and office  expense  at                                                                   
     $73,800  provides   for  the  anticipated   increase  in                                                                   
     enrollment  of 218  pregnant  women  and 1277  children.                                                                   
     DHSS  has   requested  additional  support   for  Denali                                                                   
     KidCare in the Governor's FY09 budget.                                                                                     
                                                                                                                                
     Forty one-states  allow participation by families  at or                                                                   
     above  200% FPG  with  many over  300%.  The reason  for                                                                   
     higher  SCHIP eligibility  coverage in  other states  is                                                                   
     that  the  federal  government reimburses  SCHIP  at  an                                                                   
     enhanced rate,  and higher SCHIP eligibility  has proven                                                                   
     to be  an efficient  use of  health care dollars.  While                                                                   
     most  patients   enrolled  in  Medicaid   are  children,                                                                   
     children  utilize  only  a fraction  of  the  resources.                                                                   
     Early intervention and preventative  care greatly reduce                                                                   
     visits   to  emergency   rooms   and  costly   long-term                                                                   
     illnesses.  Hospitals regularly  write-off  the cost  of                                                                   
     emergency  room  visits   by  non-emergency  low-income,                                                                   
     indigent,  or uninsured  patients whom  they must  serve                                                                   
     when  patients  cannot  pay.  The costs  of  these  non-                                                                   
     emergency  visits to  hospitals for  SCHIP children  and                                                                   
     other low-income  and uninsured,  who have no  other way                                                                   
     of obtaining health care,  are passed along in increased                                                                   
     costs to  patients who do  pay and/or are  insured under                                                                   
     private  or  state health  benefit  plans.  There is  no                                                                   
     effect on  eligibility for  Denali KidCare if  the SCHIP                                                                   
     allotment is  fully expended. If costs  exceed available                                                                   
     SCHIP funds, claims are simply  reimbursed at the lower,                                                                   
     regular  Medicaid  rate,  resulting in  reduced  federal                                                                   
     revenues.                                                                                                                  
                                                                                                                                
9:52:16 AM                                                                                                                    
                                                                                                                                
Senator Dyson  asked what would  be the financial  difference                                                                   
for a family of four.                                                                                                           
                                                                                                                                
Mr.  Obermeyer explained  that  the amount  is predicated  on                                                                   
income but he did not have the  dollar amount. He referred to                                                                   
a Medicaid expert online.                                                                                                       
                                                                                                                                
9:53:07 AM                                                                                                                    
                                                                                                                                
STEVE  HORN,  EXECUTIVE DIRECTOR,  ALASKA  BEHAVIORAL  HEALTH                                                                   
ASSOCIATION  testified   via  teleconference  and   spoke  in                                                                   
support of the  bill. He reported that Alaska  has the fourth                                                                   
most  stringent  eligibility   level  for  children's  health                                                                   
insurance  in  the country  resulting  in many  children  not                                                                   
receiving  needed  basic  health  care.  He  believed  Denali                                                                   
KidCare  will save  Alaska money  in the  long run.  Children                                                                   
without health care receive less  preventative care resulting                                                                   
in  higher  health   risks  and  greater  use   of  expensive                                                                   
emergency rooms.                                                                                                                
                                                                                                                                
9:54:38 AM                                                                                                                    
                                                                                                                                
JERRY  FULLER, MEDICARE  DIRECTOR, DEPARTMENT  OF HEALTH  AND                                                                   
SOCIAL  SERVICES testified  via teleconference  and noted  he                                                                   
did not  have the  income chart  with him  to answer  Senator                                                                   
Dyson's question  to describe the  income level for  a family                                                                   
of four at the 200% level. He  acknowledged that the Governor                                                                   
has not taken a position on this bill.                                                                                          
                                                                                                                                
9:55:37 AM                                                                                                                    
                                                                                                                                
BRENDA  MOORE, MEMBER,  MEDICAL HEALTH  BOARD AND  COUNSELOR,                                                                   
SUICIDE PREVENTION  testified  via teleconference in  support                                                                   
this  bill   and  encouraged   the  bill  being   moved  from                                                                   
Committee.                                                                                                                      
                                                                                                                                
9:56:55 AM                                                                                                                    
                                                                                                                                
NAOMI TIGNER,  ALASKA ASSOCIATION FOR HOMES  FOR CHILDREN AND                                                                   
PRESBYTERIAN HOSPITALITY  HOUSE testified via  teleconference                                                                   
in support  of this  bill. She believed  in the necessity  of                                                                   
raising the eligibility  level to 200% to enable  children to                                                                   
receive basic needed health care.                                                                                               
                                                                                                                                
AT EASE: 9:58:09 AM                                                                                                           
RECONVENED: 9:58:50 AM                                                                                                        
                                                                                                                                
9:59:05 AM                                                                                                                    
                                                                                                                                
ROD  BETIT, PRESIDENT,  ALASKA  STATE HOSPITAL  NURSING  HOME                                                                   
ASSOCIATION  testified via teleconference  and supported  the                                                                   
bill.  As a  member of  the Governor's  Health Care  Strategy                                                                   
Council,  the Association  listed this  as one  of their  key                                                                   
recommendations to bring coverage to the 200 percent level.                                                                     
                                                                                                                                
10:00:24 AM                                                                                                                   
                                                                                                                                
LAWRENCE WEISS, EXECUTIVE DIRECTOR,  ALASKA CENTER FOR PUBLIC                                                                   
POLICY testified via teleconference  in support of this bill.                                                                   
He  presented  the  economic  issues  for  the  1,200  Alaska                                                                   
children  with no  access to  health care.  For every  thirty                                                                   
cents   the  state   spends,  the   federal  governor   would                                                                   
contribute seventy  cents. Children  without health  care are                                                                   
at highest risk  to use expensive emergency  rooms where they                                                                   
do not receive preventive health  measures. This program will                                                                   
save the state money in the future.                                                                                             
                                                                                                                                
10:03:15 AM                                                                                                                   
                                                                                                                                
ANGELA LISTAN  spoke in support  of the bill. She  noted that                                                                   
the cost  of health  care has  risen faster  than almost  any                                                                   
other living  expense.  She noted that  forty-six states  use                                                                   
the  200 percent  federal poverty  level  rate. She  remarked                                                                   
that  the federal  poverty  level  for a  family  of four  is                                                                   
$53,000 which  is not enough to  cover all expenses  with the                                                                   
additional expense for health insurance.                                                                                        
                                                                                                                                
10:05:24 AM                                                                                                                   
                                                                                                                                
GERAN TARR,  ALLIANCE FOR REPRODUCTIVE JUSTICE  testified via                                                                   
teleconference in  support of the  bill. She agreed  with the                                                                   
previous comments from the others testifiers.                                                                                   
                                                                                                                                
10:06:45 AM                                                                                                                   
                                                                                                                                
GUS  MARX, GRANTS  MANAGER, JUNEAU  YOUTH SERVICES  supported                                                                   
the bill. His family has used  Denali KidCare in the past and                                                                   
he applauded the state for helping families in need.                                                                            
                                                                                                                                
10:08:11 AM                                                                                                                   
                                                                                                                                
JEFF JESSEE,  CHIEF EXECUTIVE  OFFICER, ALASKA MENTAL  HEALTH                                                                   
TRUST AUTHORITY  spoke in  support of  the bill. He  declared                                                                   
that Medicaid  is a crucial part  of funding for  children in                                                                   
need and this bill will assist  in financing future projects.                                                                   
                                                                                                                                
10:08:55 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman reviewed the  three Department of Health and                                                                   
Social Services fiscal notes attached to this bill.                                                                             
                                                                                                                                
10:09:50 AM                                                                                                                   
                                                                                                                                
Senator  Thomas  appreciated  those who  brought  forth  this                                                                   
bill. He  mentioned that  other people  were covered  by this                                                                   
bill, such as the aged, blind and mentally retarded.                                                                            
                                                                                                                                
10:10:42 AM                                                                                                                   
                                                                                                                                
Co-Chair  Hoffman MOVED  to REPORT  SB 212  out of  Committee                                                                   
with  individual  recommendations  and  the  attached  fiscal                                                                   
notes.                                                                                                                          
                                                                                                                                
Senator Dyson OBJECTED for discussion.                                                                                          
                                                                                                                                
Senator Dyson  warned of putting  into Statute  programs that                                                                   
the Legislature may  not be able to sustain in  the long run.                                                                   
He suggested the bill have a provision  that in three or four                                                                   
years the percentage  reverts back to the 175  percent unless                                                                   
the  Legislature  takes action.  The  state  may run  into  a                                                                   
deficient problem  in the future.  He reminded  the Committee                                                                   
of another state program that  allows people with significant                                                                   
health issues to get state financing.                                                                                           
                                                                                                                                
Senator Dyson WITHDREW his OBJECTION.                                                                                           
                                                                                                                                
Senator Elton OBJECTED for discussion.                                                                                          
                                                                                                                                
Senator  Elton reported  his  enthusiastic  support for  this                                                                   
bill. He remarked  that one of the biggest  debates this year                                                                   
was whether to  provide energy assistance, across  the board,                                                                   
regardless  of need  or  income level.  In  his opinion,  the                                                                   
beauty of  SB 212  is the it  provides medical assistance  to                                                                   
Alaskans in need  and this is one of the  preeminent concerns                                                                   
and rights  of all  citizens. This  program would receive  $2                                                                   
from the federal government for  every $1 spent by the state.                                                                   
                                                                                                                                
Senator  Elton   WITHDREW  his  OBJECTION.  There   being  NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
SB 212 was REPORTED out of Committee  with no recommendations                                                                   
and  three  accompanying previously  published  fiscal  notes                                                                   
from the Department of Health and Social Services.                                                                              
                                                                                                                                
10:15:19 AM                                                                                                                   
                                                                                                                                
CS FOR HOUSE BILL NO. 147(RLS)                                                                                                
                                                                                                                                
     "An Act relating to matching funds and state money for                                                                     
     state   tourism    marketing   contracts    with   trade                                                                   
    associations; and providing for an effective date."                                                                         
                                                                                                                                
10:15:34 AM                                                                                                                   
                                                                                                                                
PETE FELLMEN,  STAFF, REPRESENTATIVE  JOHN HARRIS,  presented                                                                   
an  overview  of  the  bill.  He  reported  that  HB  147  is                                                                   
basically  the same  bill  as SB  144,  sponsored by  Senator                                                                   
Lesil McGuire. The  difference between the two  bills is that                                                                   
the  finance  committee  believed  it prudent  to  limit  the                                                                   
amount  of funds  that  the  Office of  Economic  Development                                                                   
could spend  on tourism  to $9 million.  Mr. Fellman  noted a                                                                   
sunset provision  for 2011  to give  the tourism industry  an                                                                   
opportunity  to grow  and self  finance  the advertising.  He                                                                   
reminded  the Committee  that  state tourism  generates  $1.5                                                                   
billion into the state's economy.  He noted that for every $1                                                                   
the state  contributes, $1.68 in  returned to the  state. The                                                                   
economic boom  from tourism flows throughout  every region of                                                                   
Alaska  and  touches  many individuals  and  businesses.  Mr.                                                                   
Fellman disclosed  that only nineteen other  states require a                                                                   
private  sector  contribution.  Only Florida  and  California                                                                   
have private  section contributions more than  Alaska. Alaska                                                                   
ranks thirty-six in the nation in public sector funding.                                                                        
                                                                                                                                
10:19:10 AM                                                                                                                   
                                                                                                                                
Senator  Elton remained  undecided on  this approach  because                                                                   
state marketing  efforts, with  seafood and tourism,  usually                                                                   
require  a market  test. This  market test  asserts that  the                                                                   
benefiting industry believes they  are receiving enough value                                                                   
to contribute  themselves at a certain level.  His hesitation                                                                   
to this approach is that the industry  is not contributing at                                                                   
the same level as before.                                                                                                       
                                                                                                                                
10:20:19 AM                                                                                                                   
                                                                                                                                
Mr. Fellman  responded that when  the cruise ship  tax became                                                                   
part of  the state  statute, with  cruise lines paying  money                                                                   
directly  to the  state's budget,  they  withdrew $2  million                                                                   
that they had  been investing in tourism. At  one time Alaska                                                                   
was putting  in $20  million for  tourism marketing  but that                                                                   
has since decreased.                                                                                                            
                                                                                                                                
Senator  Elton  interjected that  the  cruise  lines are  not                                                                   
paying  the tax directly  but  charging the  head tax to  the                                                                   
passengers.                                                                                                                     
                                                                                                                                
10:22:05 AM                                                                                                                   
                                                                                                                                
Senator Olson  inquired about the distribution  level between                                                                   
urban and rural Alaska.                                                                                                         
                                                                                                                                
10:22:25 AM                                                                                                                   
                                                                                                                                
Mr.  Fellman responded  that  there  are a  thousand  tourism                                                                   
businesses in  the ATIA (Alaska Travel  Industry Association)                                                                   
and that money is distributed  throughout the state depending                                                                   
on how  much is  contributed.  A plan would  be developed  to                                                                   
disseminate the money throughout Alaska's various regions.                                                                      
                                                                                                                                
10:22:53 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman  reviewed  the   one  fiscal  note  for  $9                                                                   
million.                                                                                                                        
                                                                                                                                
10:23:07 AM                                                                                                                   
                                                                                                                                
Co-Chair  Hoffman noted  he had similar  concerns as  Senator                                                                   
Elton and  wondered if more  participation by  industry could                                                                   
be considered. He asked if the  bill sponsor would consider a                                                                   
lesser amount than listed in the bill                                                                                           
                                                                                                                                
10:24:07 AM                                                                                                                   
                                                                                                                                
Mr. Fellman responded that the  present amount in the bill is                                                                   
about the limit that the tourism  industry could support. The                                                                   
tourism  industry   will  contribute  $2.7  million   to  the                                                                   
marketing campaign and can not  contribute more at this time.                                                                   
He remarked that  if Alaska tourism begins to  fall, then the                                                                   
amount  businesses  will  be able  to  contribute  will  also                                                                   
decline.  He stressed  that it  was important  for Alaska  to                                                                   
help  this   industry   until  they  are   able  to   support                                                                   
themselves.                                                                                                                     
                                                                                                                                
Co-Chair Hoffman questioned why  is there the belief that the                                                                   
tourism industry is declining.  He assumed Alaska tourism was                                                                   
growing. He remarked that the  cruise line industry has grown                                                                   
tremendously  in past  years  with tourists  commenting  that                                                                   
Alaska sells itself.                                                                                                            
                                                                                                                                
10:26:27 AM                                                                                                                   
                                                                                                                                
Senator  Elton noted  that  it was  hard  for him  to hear  a                                                                   
response that that  says the tourism industry  can not afford                                                                   
more. He remarked that the tourism  industry considers itself                                                                   
larger than  the seafood industry  but the marketing  program                                                                   
for the seafood industry puts  in twice a much as the tourism                                                                   
industry and receives only $1 million from the state.                                                                           
                                                                                                                                
10:27:36 AM                                                                                                                   
                                                                                                                                
Mr. Fellman responded that the  fishing industry has received                                                                   
considerable money in the past  to help develop the industry.                                                                   
He  believed   about  $125  million  has  been   invested  in                                                                   
marketing  to help  the fishing  industry  develop. He  noted                                                                   
that tourism was  a renewable resource that  will continue to                                                                   
generate income  and grow. Tourism money benefits  the entire                                                                   
state.                                                                                                                          
                                                                                                                                
10:29:26 AM                                                                                                                   
                                                                                                                                
Senator Elton reported that as  the former Executive Director                                                                   
of  the  Alaska  Seafood  Marketing   Institute  the  seafood                                                                   
industry  received  approximately   $4  million  a  year.  He                                                                   
stressed there must  be a market test and he  did not believe                                                                   
it had been met.                                                                                                                
                                                                                                                                
10:30:23 AM                                                                                                                   
                                                                                                                                
BRETT  CARLSON,  VOLUNTEER  CHAIR,   ALASKA  TRAVEL  INDUSTRY                                                                   
ASSOCIATION  testified   via  teleconference  and   spoke  in                                                                   
support  of the  bill. He  reminded the  Committee that  ATIA                                                                   
represents  over one thousand  businesses throughout  Alaska.                                                                   
ATIA  believed   that  the  state  can  help   Alaska  travel                                                                   
businesses  and   nurture  the  private  sector   economy  to                                                                   
contribute  revenues  to  local  and  state  government.  Mr.                                                                   
Carlson stressed  that Alaska's tourism marketing  funding is                                                                   
broken. ATIA  believes that this  bill represents a  fix. The                                                                   
$9  million fiscal  note is  less  than the  $9.5 million  in                                                                   
funding that passed out of the  Senate Finance Committee last                                                                   
session.   It  identifies  a   sustainable  travel   industry                                                                   
generated  funding  source  for  Alaska's  tourism  marketing                                                                   
program.                                                                                                                        
                                                                                                                                
10:33:22 AM                                                                                                                   
                                                                                                                                
Co-Chair Hoffman  revealed how proud  he was that  Alaska was                                                                   
leading the  way in getting  participation from  industry and                                                                   
business and hoped  other states would take  that initiative.                                                                   
He  judged  it would  be  better  to  get more  industry  and                                                                   
business participation.                                                                                                         
                                                                                                                                
10:34:09 AM                                                                                                                   
                                                                                                                                
HB  147  was   HEARD  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
CS FOR HOUSE BILL NO. 166(FIN)                                                                                                
                                                                                                                                
     "An Act  relating to  contributions from permanent  fund                                                                   
     dividends   to   community   foundations,   to   certain                                                                   
     educational   organizations,   and  to   certain   other                                                                   
     charitable   organizations;   and   providing   for   an                                                                   
     effective date."                                                                                                           
                                                                                                                                
Co-Chair Hoffman  MOVED to ADOPT Senate  Committee Substitute                                                                   
for  CSHB  166,   work  draft  25-LS0678\V  as   the  working                                                                   
document.  There being  NO  OBJECTION, the  Senate  Committee                                                                   
Substitute Version V was adopted.                                                                                               
                                                                                                                                
KACI  SCHROEDER, STAFF,  REPRESENTATIVE  THOMAS, provided  an                                                                   
overview  of the committee  substitute.  The first change  in                                                                   
the  new committee  substitute  Version V  was  in Section  1                                                                   
which allows Alaskans to check  off and contribute $25 to the                                                                   
full dividend amount as a donation  to charity. On page 2, it                                                                   
states that  the contribution  can not  be changed  after the                                                                   
application  is  filed  and  no   money  contributed  by  the                                                                   
individual  shall  be  used  for  administrative  costs.  Ms.                                                                   
Schroeder continued  that on page  2, Section (c)  it further                                                                   
clarifies the  types of organizations  that are  eligible for                                                                   
this program  and on  page 3  it lists  the criteria  that an                                                                   
organization must  meet before they are allowed to  be put on                                                                   
the permanent  fund application.  Page  4 clarifies that  the                                                                   
department may  not use any contributions  for administrative                                                                   
costs but also  states that the department can  collect a $50                                                                   
application fee. Ms.  Schroeder noted that on page  4, (g) it                                                                   
allows  the department  to circumvent  the procurement  code.                                                                   
She signified  that by January  of each year  the Legislature                                                                   
would receive  a report  on how the  program is working.  She                                                                   
cited that  Section 2, page  5 deals with language  requested                                                                   
by the  Department of Revenue.  She noted the last  change on                                                                   
page 6 states that this will not  apply to the 2008 dividend.                                                                   
The program  will begin in 2010  to give the  department time                                                                   
to implement the program.                                                                                                       
                                                                                                                                
10:39:09 AM                                                                                                                   
                                                                                                                                
Senator Olson  asked for  the reasoning behind  circumventing                                                                   
the procurement quota.                                                                                                          
                                                                                                                                
Ms.  Schroeder replied  that  it had  been  requested in  the                                                                   
House by Representative Coghill.  The United Way was the only                                                                   
known program ready to do this program now.                                                                                     
                                                                                                                                
10:39:46 AM                                                                                                                   
                                                                                                                                
DEBBIE  RICHTER, DIRECTOR,  DIVIDEND DIVISION  noted she  was                                                                   
available for questions.                                                                                                        
                                                                                                                                
JERRY   BURNETT,   DIRECTOR,   DIVISION   OF   ADMINISTRATIVE                                                                   
SERVICES, DEPARTMENT OF REVENUE  remarked that the department                                                                   
neither  supports  nor  opposes  this bill.  There  is  other                                                                   
language  in the  bill that  would eliminate  paper and  work                                                                   
load  for  the  department  to  allow  staff  to  respond  to                                                                   
questions.                                                                                                                      
                                                                                                                                
Co-Chair  Stedman inquired  if the department  feels  this is                                                                   
administratively controllable.                                                                                                  
                                                                                                                                
10:42:14 AM                                                                                                                   
                                                                                                                                
Ms. Richter remarked that the  division has been working with                                                                   
the United Way  as the potential contractor  for handling the                                                                   
qualification  of  the agencies  and  they have  expressed  a                                                                   
concern.  They  have offered  an  800  number that  would  be                                                                   
posted on their website for people call and ask questions.                                                                      
                                                                                                                                
Co-Chair Stedman requested the fiscal impact in the future.                                                                     
                                                                                                                                
10:43:01 AM                                                                                                                   
                                                                                                                                
Mr. Burnett  reported  that the bill  is written  prohibiting                                                                   
the division from  using any Alaskan's dividend  money to pay                                                                   
for this  program. Any  money spent would  be money  that was                                                                   
contractual from  the Rasmussen  Foundation or other  private                                                                   
sources. The  fiscal note  just gives spending  authorization                                                                   
for  designated  program receipts  that  are  donated to  the                                                                   
state for this purpose.                                                                                                         
                                                                                                                                
Co-Chair Stedman  inquired if it was expected  that financial                                                                   
support  would still  be  there  in three  years  or is  this                                                                   
funding just to start the program.                                                                                              
                                                                                                                                
10:44:28 AM                                                                                                                   
                                                                                                                                
Senator  Elton questioned  if  the division  is  anticipating                                                                   
that future costs will be funded by an application fee.                                                                         
                                                                                                                                
Mr. Burnett  replied that the  $50 application fee  would not                                                                   
be  significant in  terms of  funding for  this program.  The                                                                   
number  of  organizations  would  not  be  large  enough.  He                                                                   
indicated that there would be,  after successful two to three                                                                   
years,  some  arrangement with  the  organizations  receiving                                                                   
this based  on the costs.  If the sunset  is removed,  then a                                                                   
funding  formula would  need to  be  put into  place at  that                                                                   
time.                                                                                                                           
                                                                                                                                
10:45:50 AM                                                                                                                   
                                                                                                                                
Senator Elton asked why the application fee was necessary.                                                                      
                                                                                                                                
Mr. Burnett  replied that  the department  did not  write the                                                                   
bill or  add the  application  fee as a  funding source.  The                                                                   
application fee money would just  offset some of the costs of                                                                   
qualifying  organizations  rather  than  the  ongoing  costs.                                                                   
Under  this  bill  the Rasmussen  foundation  would  pay  the                                                                   
administration costs for the first three years.                                                                                 
                                                                                                                                
10:46:51 AM                                                                                                                   
                                                                                                                                
Co-Chair Hoffman  inquired why it was necessary  to have four                                                                   
thousand man hours to implement this legislation.                                                                               
                                                                                                                                
Ms.   Richter  replied   that   the  eligibility   technician                                                                   
requested   is  to   answer  public   response  because   the                                                                   
department expects  a significant increase in  public contact                                                                   
questioning  the  new  information on  the  application.  The                                                                   
division is  not able to handle  the public response  at this                                                                   
time.                                                                                                                           
                                                                                                                                
Co-Chair Hoffman signified that  he does not see the division                                                                   
receiving two thousand hours of  inquiry for this program. He                                                                   
noted that  the Governor was  looking for more  efficiency in                                                                   
government and this request did  not reflect that philosophy.                                                                   
                                                                                                                                
Mr. Burnett agreed  that the division may need  less time and                                                                   
effort but the  fiscal note is an authorization  to use money                                                                   
given by  the Rasmussen  Foundation for  this purpose.  There                                                                   
may not be a significant increase  over time but only a short                                                                   
term bump of inquiries. Any employees  hired for this program                                                                   
will be project specific employees  not a permanent full time                                                                   
part  of the  department  until  after  this bill  becomes  a                                                                   
permanent law.                                                                                                                  
                                                                                                                                
10:49:23 AM                                                                                                                   
                                                                                                                                
Senator  Elton   asked  what  kind  of  public   contact  the                                                                   
department anticipates.                                                                                                         
                                                                                                                                
Ms.  Richter  replied  that the  department  anticipates  the                                                                   
public  will  have  many  questions   about  the  program  in                                                                   
general,  such   as  whether  their  contributions   are  tax                                                                   
deductable  or  if  they  can  change  their  selection.  The                                                                   
division  anticipates  that  if   only  one  percent  of  the                                                                   
applicants  that  apply  for a  dividend  actually  call  the                                                                   
division,  this would  be  approximately  six thousand  phone                                                                   
calls.                                                                                                                          
                                                                                                                                
10:50:39 AM                                                                                                                   
                                                                                                                                
Senator  Thomas remarked  that the  division does  anticipate                                                                   
that the  number of  calls could be  less than projected  and                                                                   
the  three years  of  Rasmussen  contributions  in the  first                                                                   
three years will  take care of that in the  beginning stages.                                                                   
He  inquired if  there are  one thousand  who regularly  file                                                                   
990s regularly.                                                                                                                 
                                                                                                                                
Ms. Richter believed it to be two thousand.                                                                                     
                                                                                                                                
10:52:00 AM                                                                                                                   
                                                                                                                                
JEFF PARK,  VICE PRESIDENT,  RASMUSSEN FOUNDATION,  responded                                                                   
that the  foundation would engage  in working with  the third                                                                   
party provider,  the United Way,  and an outreach  program to                                                                   
inform the  public about the  purpose of the  dividend check-                                                                   
off.  The fiscal  note assumes  that the  department will  be                                                                   
taking on many of these new activities.                                                                                         
                                                                                                                                
10:54:33 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman requested an overview of the bill.                                                                             
                                                                                                                                
Mr. Parks  remarked that this  bill provides Alaskans  with a                                                                   
mechanism for  making charitable donations to  their favorite                                                                   
non-profits. He  addressed that  the three year  provision of                                                                   
the   program  would   be  underwritten   by  the   Rasmussen                                                                   
Foundation.  If  the program  were  to continue  beyond  year                                                                   
three it would require action by the Legislature.                                                                               
                                                                                                                                
10:55:49 AM                                                                                                                   
                                                                                                                                
MIKE  WALSH,  VICE  PRESIDENT,  4 ACRE  GROUP  testified  via                                                                   
teleconference and remarked he was available for questions.                                                                     
                                                                                                                                
10:56:38 AM                                                                                                                   
                                                                                                                                
Co-Chair Hoffman  MOVED to REPORT  SCS CSHB 166 (FIN)  out of                                                                   
Committee    with   individual    recommendations   and    an                                                                   
accompanying fiscal. There being NO OBJECTION, it was so                                                                        
ordered.                                                                                                                        
                                                                                                                                
SCS CSHB 166 (FIN) was REPORTED out of Committee with no                                                                        
recommendations and an accompanying new fiscal note from the                                                                    
Department of Revenue.                                                                                                          
                                                                                                                                
AT EASE: 10:57:24 AM                                                                                                          
RECONVENED: 10:59:14 AM                                                                                                       
                                                                                                                                
CS FOR HOUSE BILL NO. 289(FSH)                                                                                                
                                                                                                                                
     "An  Act exempting  employers  from paying  unemployment                                                                   
     tax for  temporary services  provided by fishing  vessel                                                                   
     crewmembers and related to  emergency oil spill training                                                                   
     and response activities;  and providing for an effective                                                                   
     date."                                                                                                                     
                                                                                                                                
CSHB 289 (FSH) was SCHEDULED but NOT HEARD.                                                                                     
                                                                                                                                
CS FOR HOUSE BILL NO. 307(FIN)                                                                                                
                                                                                                                                
     "An Act relating to penalizing certain misdemeanor                                                                         
     domestic violence assaults as felonies."                                                                                   
                                                                                                                                
CSHB 307 (FIN) was SCHEDULED but NOT HEARD.                                                                                     
                                                                                                                                
CS FOR HOUSE BILL NO. 406(STA)                                                                                                
                                                                                                                                
     "An Act relating to contracts for the preparation of                                                                       
     election ballots."                                                                                                         
                                                                                                                                
CSHB 406 (STA) was SCHEDULED but NOT HEARD.                                                                                     
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:59 AM                                                                                           
                                                                                                                                
                                                                                                                                

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