Legislature(2009 - 2010)SENATE FINANCE 532

03/30/2009 09:00 AM FINANCE


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 45 VETERANS' CEMETERIES/FUND/LICENSE PLATES TELECONFERENCED
Moved CSSB 45(FIN) Out of Committee
+= SB 32 MEDICAID:HOME/COMMUNITY BASED SERVICES TELECONFERENCED
Moved CSSB 32(HSS) Out of Committee
+ SB 96 CHILD SUPPORT/ CASH MEDICAL SUPPORT TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SENATE FINANCE COMMITTEE                                                                                       
                      March 30, 2009                                                                                            
                         9:02 a.m.                                                                                              
                                                                                                                                
9:02:13 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  Stedman   called  the  Senate   Finance  Committee                                                                    
meeting to order at 9:02 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Johnny Ellis                                                                                                            
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Charlie Huggins, Vice-Chair                                                                                             
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Senator  Gene  Therriault;   Hensley,  Max,  Staff,  Senator                                                                    
Ellis;  Jon Sherwood,  Director, Office  of Program  Review,                                                                    
Department  of Health  and Social  Services (DHSS);  Senator                                                                    
Bettye  Davis; Lynda,  Zaugg, Staff,  Senator Bettye  Davis;                                                                    
Ginger  Blaisdell,  Director,   Division  of  Administrative                                                                    
Services, Department  of Revenue; Peter  Putzier, Department                                                                    
of Law.                                                                                                                         
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
John  Mallonee, Acting  Director, Child  Support Enforcement                                                                    
Division,   Department   of    Revenue;   Stacy   Steinberg,                                                                    
Department of Law.                                                                                                              
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 32     "An Act relating to medical assistance payments                                                                       
          for home and community-based services."                                                                               
                                                                                                                                
          SB 32 was REPORTED out of Committee with a "do                                                                        
          pass" recommendation and with two new fiscal                                                                          
          impact  notes  by  the Department  of  Health  and                                                                    
          Social Services                                                                                                       
                                                                                                                                
SB 45     "An Act relating to state employment preferences                                                                      
          for  veterans,   former  prisoners  of   war,  and                                                                    
          members of the  Alaska National Guard; authorizing                                                                    
          the Department  of Military and  Veterans' Affairs                                                                    
          to   establish  and   maintain  Alaska   veterans'                                                                    
          cemeteries;  establishing   the  Alaska  veterans'                                                                    
          cemetery   fund   in   the   general   fund;   and                                                                    
          authorizing the legislature  to appropriate income                                                                    
          from  fees collected  for commemorative  veterans'                                                                    
          plates to the Alaska veterans' cemetery fund."                                                                        
                                                                                                                                
          SB  45  was REPORTED  out  of  Committee with  "no                                                                    
                    recommendation" and with a previously                                                                       
                    published fiscal impact note FN1 (MVA).                                                                     
                                                                                                                                
SB 96     "An Act relating to nonpayment of child support;                                                                      
          relating  to certain  judicial and  administrative                                                                    
          orders for  medical support  of a  child; relating                                                                    
          to  periodic   review  and  adjustment   of  child                                                                    
          support   orders;   relating    to   relief   from                                                                    
          administrative child  support orders;  relating to                                                                    
          child  support  arrearages;  relating  to  medical                                                                    
          support of  a child  and the Alaska  Native family                                                                    
          assistance  program;  amending Rule  90.3,  Alaska                                                                    
          Rules  of Civil  Procedure; and  providing for  an                                                                    
          effective date."                                                                                                      
                                                                                                                                
          SB 96 was HEARD and  HELD in Committee for further                                                                    
                    consideration.                                                                                              
                                                                                                                                
SENATE BILL NO. 45                                                                                                            
                                                                                                                                
     "An Act  relating to  state employment  preferences for                                                                    
     veterans, former  prisoners of war, and  members of the                                                                    
     Alaska  National Guard;  authorizing the  Department of                                                                    
     Military  and   Veterans'  Affairs  to   establish  and                                                                    
     maintain Alaska veterans'  cemeteries; establishing the                                                                    
     Alaska  veterans' cemetery  fund in  the general  fund;                                                                    
     and authorizing  the legislature to  appropriate income                                                                    
     from fees collected  for commemorative veterans' plates                                                                    
     to the Alaska veterans' cemetery fund."                                                                                    
                                                                                                                                
9:02:30 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman  reviewed SB  45.  He  explained that  the                                                                    
hearing  was the  second for  SB 45,  with public  testimony                                                                    
taken at  the initial Senate Finance  Committee meeting. The                                                                    
current intent is brief discussion of the legislation.                                                                          
                                                                                                                                
SENATOR  GENE   THERRIAULT  reviewed  the   legislation.  He                                                                    
explained  that the  bill contains  two sections.  The first                                                                    
allows  a specialty  request plate  for Alaska  veterans. He                                                                    
explained that funds generated are  routed into a new Alaska                                                                    
veteran's cemetery  fund. The funds are  appropriated by the                                                                    
legislature  for  the  creation   of  a  veteran's  cemetery                                                                    
including  the  ongoing  maintenance of  the  cemetery.  The                                                                    
legislation   alters   the  veteran's   hiring   preferences                                                                    
currently  in   statute.  Finally,  the  end   of  the  bill                                                                    
references the  Alaska veteran's cemeteries and  the federal                                                                    
codes  enabling the  statute  to conform  to  the codes.  He                                                                    
mentioned  that the  Fairbanks North  Star Borough  passed a                                                                    
resolution in  support of the  creation of this  cemetery in                                                                    
Interior  Alaska  and  recently   passed  a  new  resolution                                                                    
updating  support  to  ensure  awareness  that  the  current                                                                    
assembly supports the effort.                                                                                                   
                                                                                                                                
Co-Chair Stedman  noted that Alaska's oldest  cemetery is in                                                                    
Sitka.  The  cemetery  is   currently  near  capacity,  with                                                                    
expansion  issues.   Alaska  has  the  highest   percent  of                                                                    
veterans per capita in the  country. The proposal is to move                                                                    
forward with a  state sponsored cemetery in  a location that                                                                    
is accessible to most state residents.                                                                                          
                                                                                                                                
9:06:48 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  suggested  that  cemeteries  operated  by                                                                    
municipalities  and  dedicated  to veterans  are  funded  by                                                                    
collected fees. He requested the  opportunity to address his                                                                    
concern.                                                                                                                        
                                                                                                                                
Co-Chair Stedman  discussed the  fiscal note  dated February                                                                    
6,   2009  illustrating   a  $250   thousand  general   fund                                                                    
appropriation, the next fiscal  note dated February 23, 2009                                                                    
shows a  $750 thousand general fund  appropriation. He noted                                                                    
that the governor originally set  aside $250 thousand in the                                                                    
FY10 capital  budget, which was since  removed. He suggested                                                                    
that  the  committee adopt  the  initial  fiscal note  dated                                                                    
February 6, 2009.                                                                                                               
                                                                                                                                
9:08:18 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  MOVED to report  CSSB 45 out  of Committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note dated  February 6, 2009.  There being NO  OBJECTION, it                                                                    
was so ordered.                                                                                                                 
                                                                                                                                
CSSB  45  was  REPORTED  OUT of  Committee  with  individual                                                                    
recommendations  and  the  accompanying  fiscal  note  dated                                                                    
February 6, 2009.                                                                                                               
                                                                                                                                
SENATE BILL NO. 32                                                                                                            
                                                                                                                                
     "An Act relating to medical assistance payments for                                                                        
     home and community-based services."                                                                                        
                                                                                                                                
9:09:21 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  MOVED to  ADOPT CSSB  32 (FIN),  version M                                                                    
out of  Committee with the accompanying  fiscal notes. There                                                                    
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
Senator  Ellis reviewed  the Committee  Substitute (CS).  He                                                                    
explained  that  his  aide  Max  Hensley  will  explain  the                                                                    
legislation.                                                                                                                    
                                                                                                                                
HENSLEY,   MAX,   STAFF,   SENATOR   ELLIS,   reviewed   the                                                                    
legislation. He  thanked the staff  of the Co-chair  for the                                                                    
work done in  developing the CS. He stated that  the CS is a                                                                    
simpler  bill which  greatly reduces  the forecasted  fiscal                                                                    
impact  to the  state.  The CS  removes  the general  relief                                                                    
medical programs formerly in the  Health and Social Services                                                                    
committee's  work version.  The  intention is  focus on  the                                                                    
Medicaid  sector.   He noted  Page 2,  Line 5  replacing the                                                                    
word "consider" for  "use" and Page 2, Line  6 replacing the                                                                    
word  "cost"  with  "periodic cost  surveys."  Both  changes                                                                    
achieve  the goals  of the  original  legislation with  less                                                                    
overhead and administrative burden.  He noted two new fiscal                                                                    
notes;  the  first  maintains  funding  for  three  existing                                                                    
positions  not included  in the  FY10 operating  budget, the                                                                    
second includes updated assumptions  for rates whose funding                                                                    
is  appropriated  by the  legislature.  He  defined the  new                                                                    
fiscal notes as predictive assumptions.                                                                                         
                                                                                                                                
9:12:49 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman  requested  a  brief  explanation  of  the                                                                    
bill's purpose for constituents  at home. Mr. Hensley stated                                                                    
that SB  32 provides  regular and  periodic rate  review for                                                                    
the  providers of  home and  community based  services under                                                                    
the Medicaid waiver program.                                                                                                    
                                                                                                                                
Co-Chair Stedman addressed the  fiscal notes. The first note                                                                    
is from Support Services in  an annual general fund match of                                                                    
$182 thousand  to fund  three new  full time  positions. The                                                                    
second  note   is  from   Senior  and   Disability  Services                                                                    
illustrating zero cost  for FY10 and FY11, and  a $3 million                                                                    
cost   in   FY12   for   increased   Medicaid   benefit   on                                                                    
appropriation.                                                                                                                  
                                                                                                                                
Senator Ellis  noted appreciation for  the work done  on the                                                                    
bill.   He   expressed    satisfaction   at   the   improved                                                                    
legislation.                                                                                                                    
                                                                                                                                
9:14:50 AM                                                                                                                    
                                                                                                                                
JON   SHERWOOD,   DIRECTOR,   OFFICE  OF   PROGRAM   REVIEW,                                                                    
DEPARTMENT   OF   HEALTH   AND   SOCIAL   SERVICES   (DHSS),                                                                    
represented the  administration. He appreciated the  bill in                                                                    
the  current  draft.  He felt  that  there  was  flexibility                                                                    
present  in the  amended  draft  and he  felt  it worthy  of                                                                    
statute.                                                                                                                        
                                                                                                                                
Co-Chair Stedman  reminded of public testimony  taken at the                                                                    
previous hearing.                                                                                                               
                                                                                                                                
Co-Chair Hoffman informed that  the fiscal notes stating the                                                                    
amounts do not include inflation unless otherwise noted.                                                                        
                                                                                                                                
Mr. Sherwood  answered that  there is  not inflation  on the                                                                    
administrative  cost of  the  fiscal note,  but  there is  a                                                                    
specific inflation  rate for the  Medicare home  health care                                                                    
market  basket  index.  In  an   effort  to  give  the  best                                                                    
approximation  of   the  impact  of  the   bill  showed  the                                                                    
inflation rate moving forward from FY12.                                                                                        
                                                                                                                                
9:17:44 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  asked  if  the  inflation  rate  was  2.8                                                                    
percent. Mr. Sherwood confirmed 2.8 percent.                                                                                    
                                                                                                                                
Senator Olson asked the department's  view on Section 3. Mr.                                                                    
Sherwood  responded   that  Section   3  would   repeal  the                                                                    
provision  that  the  department  must report  on  the  rate                                                                    
setting process  by 2014.  By 2014,  he opined  the progress                                                                    
will be well established and  functional. He stated that the                                                                    
department  did not  anticipate the  need to  provide annual                                                                    
progress  reports.  He  stated that  reporting  would  prove                                                                    
redundant each  year although the  department is  willing to                                                                    
present reports at the will of the legislature.                                                                                 
                                                                                                                                
Senator  Olson  asked  how  to  ensure  that  the  community                                                                    
service providers continue to  receive compensation for fair                                                                    
market  value.   Mr.  Hensley  explained  that   the  sunset                                                                    
provision removes the reporting  provision fee, but the rate                                                                    
setting provision remains in statute.                                                                                           
                                                                                                                                
9:19:30 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  asked   about  the  additional  personnel                                                                    
requested. Mr. Sherwood answered  that the department sought                                                                    
information regarding  reports from providers  learning that                                                                    
the  providers   neglect  to   report  accurate   costs.  He                                                                    
suggested that  the legislation must inform  providers about                                                                    
surveys. Surveys and  analysis must occur prior  to new rate                                                                    
setting.                                                                                                                        
                                                                                                                                
Co-Chair   Hoffman  asked   why   the  department   requests                                                                    
continuation  of  the  three  new  positions  following  the                                                                    
process of  survey and analysis.  Mr. Sherwood  replied that                                                                    
cost  surveys  are  anticipated  periodically.  The  ongoing                                                                    
process  ensures  current   information  required  for  rate                                                                    
setting.  He mentioned  that hiring  new providers  requires                                                                    
training.  Mr. Hensley  explained that  the three  positions                                                                    
exist  currently  and   therefore  maintenance  rather  than                                                                    
creation is the goal.                                                                                                           
                                                                                                                                
9:22:27 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman asked  for verification  of Mr.  Hensley's                                                                    
comment.   Mr.  Sherwood   responded   that  the   requested                                                                    
positions  are   currently  filled  and  funded   under  the                                                                    
previous SB 61 efforts addressing Medicaid reform.                                                                              
                                                                                                                                
Senator Ellis MOVED to report  CSSB 32 out of Committee with                                                                    
individual recommendations and  the accompanying fiscal note                                                                    
there being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
9:23:50 AM                                                                                                                    
                                                                                                                                
SENATE BILL NO. 96                                                                                                            
                                                                                                                                
     "An  Act  relating  to  nonpayment  of  child  support;                                                                    
     relating to certain  judicial and administrative orders                                                                    
     for medical  support of a  child; relating  to periodic                                                                    
     review   and  adjustment   of  child   support  orders;                                                                    
     relating  to relief  from administrative  child support                                                                    
     orders; relating to  child support arrearages; relating                                                                    
     to medical  support of  a child  and the  Alaska Native                                                                    
     family assistance  program; amending Rule  90.3, Alaska                                                                    
     Rules  of   Civil  Procedure;  and  providing   for  an                                                                    
     effective date.                                                                                                            
                                                                                                                                
LYNDA, ZAUGG, STAFF, SENATOR BETTYE DAVIS,                                                                                      
                                                                                                                                
     In  July  2008,  the   federal  government  issued  new                                                                    
     medical support regulation that  require states to have                                                                    
     guidelines addressing  how either or both  parents will                                                                    
     provide   for  a   child's  healthcare   needs  through                                                                    
     accessible  health  insurance  coverage,  cash  medical                                                                    
     support,   or  both.      Failure   to  satisfy   these                                                                    
     regulations   jeopardizes  federal   funding  for   the                                                                    
     state's child support programs.                                                                                            
                                                                                                                                
          Under the federal regulations, states must order                                                                      
     either or  both parents to  purchase reasonably-priced,                                                                    
     accessible  health  insurance  coverage,  cash  medical                                                                    
     support,  or  both.    Cash   medical  support  may  be                                                                    
     required  in  those  cases where  no  reasonable-priced                                                                    
     health insurance  coverage is accessible to  the child.                                                                    
     If a  parent is  ordered to  pay cash  medical support,                                                                    
     the Child  Support Services  Division must  enforce the                                                                    
     ongoing  cash medical  support  obligation  as well  as                                                                    
     collect any cash medical support arrears.                                                                                  
                                                                                                                                
                                                                                                                                
9:27:36 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman asked if medical payments were retroactive                                                                     
applying to past orders.                                                                                                        
                                                                                                                                
GINGER  BLAISDELL,  DIRECTOR,   DIVISION  OF  ADMINISTRATIVE                                                                    
SERVICES, DEPARTMENT  OF REVENUE  introduced two  members of                                                                    
the  Child Support  Enforcement Division.  She provided  the                                                                    
choice  of  either  hearing a  sectional  analysis  by  John                                                                    
Mallonee,  or asking  questions  directly  of her.  Co-Chair                                                                    
Stedman requested the presentation by Mr. Mallonee.                                                                             
                                                                                                                                
JOHN  MALLONEE, ACTING  DIRECTOR, CHILD  SUPPORT ENFORCEMENT                                                                    
DIVISION,    DEPARTMENT    OF   REVENUE    (testified    via                                                                    
teleconference).  He explained  that the  federal government                                                                    
provides greater than  66 percent of the  funding needed for                                                                    
the  program. In  order to  secure funding,  the state  must                                                                    
comply  with requirements  of the  Social  Security Act  and                                                                    
federal  regulations.  Failure   to  meet  the  requirements                                                                    
places  federal funding  for the  child  support program  at                                                                    
risk. The  funding amounts to approximately  $17 million per                                                                    
year.  This legislation  addresses three  areas where  state                                                                    
statutes require  change to federal requirements  and ensure                                                                    
federal  funding for  the child  support program.  The first                                                                    
area is the  Uniform Family Support Act. The  purpose of the                                                                    
act  is to  provide  efficient procedures  to collect  child                                                                    
support  in  interstate  cases  and  to  eliminate  multiple                                                                    
support orders permitted under child  support laws. In 1995,                                                                    
Alaska  enacted  a  version  of the  act  that  contained  a                                                                    
different  definition  of  "state"  than  contained  in  the                                                                    
Uniform   Act.   The   following   year,   Congress   passed                                                                    
legislation mandating  the states adopt the  Uniform Act for                                                                    
eligibility for  continued receipt of federal  funds for the                                                                    
child support  program. Alaska's definition of  "state" does                                                                    
not  encompass two  entities included  in  the uniform  act.                                                                    
These two  entities are the  "United States  Virgin Islands"                                                                    
and an  "Indian tribe." The bill  eliminates the differences                                                                    
by  incorporating the  two entities  in  the Alaska  Uniform                                                                    
Interstate Family Support Act Statute.                                                                                          
                                                                                                                                
Mr.  Mallonee  discussed  the topic  of  child  support.  He                                                                    
mentioned that  the state child  support program  efforts to                                                                    
secure an  enforced medical support  order met  with limited                                                                    
success.  Congress  enacted  the Child  Support  Performance                                                                    
Incentive Act  of 1998. The  act directed  the establishment                                                                    
of  medical support  working groups.  The group  includes 30                                                                    
members  representing   federal  and  state   child  support                                                                    
programs  employers,  payroll professionals,  health  plans,                                                                    
and  the children's  advocates. The  working group's  report                                                                    
was  delivered to  Congress in  2000.  In July  of 2008,  in                                                                    
response   to   several   of   the   working   group's   key                                                                    
recommendations,  the   federal  office  of   child  support                                                                    
enforcement  issued new  medical support  regulations. These                                                                    
regulations   require    a   state   to    have   guidelines                                                                    
necessitating  that both  parents  provide  for the  child's                                                                    
healthcare  needs through  accessible health  care insurance                                                                    
coverage, cash  medical support or  both. Under  the federal                                                                    
regulations, a  state must order  either or both  parents to                                                                    
purchase  reasonably  priced   accessible  health  insurance                                                                    
coverage,  cash  medical  support   or  both.  While  health                                                                    
insurance coverage  is preferred,  cash support  is required                                                                    
in  cases  where  no   reasonably  priced  health  insurance                                                                    
coverage is accessible to the  child. If a parent is ordered                                                                    
to  pay cash  medical  support, the  child support  division                                                                    
must enforce the ongoing cash  medical support obligation as                                                                    
well  as  collecting  any medical  support.  The  bill  adds                                                                    
existing authority  to order either  or both parents  to pay                                                                    
the  cash  medical  support   if  warranted.  While  meeting                                                                    
federal  requirements,   the  bill  assures   that  children                                                                    
receive medical support to which they are entitled.                                                                             
                                                                                                                                
Mr. Mallonee stated that the  third area involves review and                                                                    
modification of  support orders. Clients may  request review                                                                    
at  any  time. If  no  request  is  made,  a review  is  not                                                                    
performed. Current federal regulations  require the state to                                                                    
have  procedures  of  which child  support  orders  must  be                                                                    
reviewed and  appropriately modified every three  years. The                                                                    
bill  requires   the  agency  to  perform   the  reviews  in                                                                    
compliance with  the review  cycle; however  this in  no way                                                                    
limits a client's  ability to request a review  at any time.                                                                    
He  explained  that  an  automated  system  collects  income                                                                    
information  from each  party  once a  year  and performs  a                                                                    
calculation determining whether the  case meets the criteria                                                                    
for modification.  If it appears that  modification criteria                                                                    
are met,  notices are  sent to  both parties  informing them                                                                    
that a modification  may be warranted. In  addition to these                                                                    
federal  required  provisions,  the bill  also  removes  the                                                                    
language  limiting  who  may request  the  correction  of  a                                                                    
clerical  mistake  in an  administrative  order  or who  may                                                                    
request the vacation of an administrative order.                                                                                
                                                                                                                                
9:34:38 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman asked about the  changing of the definition                                                                    
of state  and the impact  the change has in  undermining the                                                                    
state's sovereignty.  Ms. Blaisdell informed  that assistant                                                                    
attorney general  dealing directly with tribal  affairs from                                                                    
the  Department  of  Law  (DOL)   was  available  to  answer                                                                    
questions.                                                                                                                      
                                                                                                                                
PETER PUTZIER, DEPARTMENT OF LAW  spoke to the amendment. He                                                                    
opined that the changes are  procedural in how child support                                                                    
orders   are  enforced.   The  changes   do  not   affect  a                                                                    
substantive  change  either  expanding  or  limiting  tribal                                                                    
jurisdiction and conversely neither  expand nor contract the                                                                    
state's   jurisdiction  with   respect   to  child   support                                                                    
enforcement authority.                                                                                                          
                                                                                                                                
Co-Chair  Stedman  asked  if the  change  might  potentially                                                                    
affect future court challenges.  Mr. Putzier opined that the                                                                    
change would  not impact future court  challenges. He stated                                                                    
that the change only affects  procedural changes in the law.                                                                    
The  issue of  tribal jurisdiction  will remain  unresolved.                                                                    
The  bill  does not  expand  or  restrict jurisdiction  that                                                                    
tribes have on one hand or the state on the other.                                                                              
                                                                                                                                
Co-Chair Stedman  asked if  the administration  supports the                                                                    
bill. Ms. Blaisdell answered yes.                                                                                               
                                                                                                                                
Co-Chair  Stedman   noticed  the   request  to   change  the                                                                    
definition of state and the  amount of $17 million per year.                                                                    
He asked the impact of the  bill if the legislature takes no                                                                    
positive   action.   Ms.   Blaisdell   answered   that   the                                                                    
administration  received a  letter regarding  the definition                                                                    
of "state."  She cited  a section  reporting that  the funds                                                                    
are at  risk if the state  is not involved in  a block grant                                                                    
for  The  Temporary  Assistance to  Needy  Families  (TANF),                                                                    
which requires the  state to certify that it  will operate a                                                                    
child  support  enforcement  program under  the  state  plan                                                                    
under Section d. Therefore Alaska  should be aware that TANF                                                                    
funds  may also  be  at risk  if the  state  does not  enact                                                                    
conforming child support legislation.  She informed that $17                                                                    
million is  the amount of  federal funding that goes  to the                                                                    
child  support  services  division. Unfortunately  the  TANF                                                                    
grant is  also used widely  in the Department of  Health and                                                                    
Social Services  (DHSS). If the  federal government  were to                                                                    
restrict the entire  federal TANF grant, it  would equate to                                                                    
$85 million in negative impact to the state.                                                                                    
                                                                                                                                
Co-Chair Stedman  asked about the  "strings attached"  to SB
96 as  suspected with the  economic stimulus bill.  He asked                                                                    
how  to   specifically  reconcile  the  issue   of  "strings                                                                    
attached."                                                                                                                      
                                                                                                                                
9:38:51 AM                                                                                                                    
                                                                                                                                
Ms.  Blaisdell confessed  that she  did  not understand  the                                                                    
connection  of  "strings  attached"   and  SB  96.  Co-Chair                                                                    
Stedman  replied that  the federal  money  is contingent  on                                                                    
changing  the  definition  of  "state."  He  asked  how  the                                                                    
committee might  reconcile decisions regarding  the stimulus                                                                    
bill. Ms.  Blaisdell informed  that SB  96 was  not directly                                                                    
related to the federal  stimulus package. She explained that                                                                    
SB 96 informs that Alaska must  be in compliance with the US                                                                    
act. If  the state is not  in compliance, we are  at risk of                                                                    
losing  significant federal  funding.  The federal  economic                                                                    
funding  child  support  section  allows  child  support  to                                                                    
utilize some of its federal  funding as a general fund match                                                                    
providing a  benefit. She  did not believe  that there  is a                                                                    
direct  correlation  between  this   bill  and  the  federal                                                                    
economic  stimulus  package  other  than  child  support  is                                                                    
impacted by both.                                                                                                               
                                                                                                                                
Co-Chair  Stedman understood  that the  legislation was  not                                                                    
the stimulus  bill. He was  confused about the  message that                                                                    
was  coming from  the administration  dealing with  bills or                                                                    
requests to the state with  "strings attached." He asked how                                                                    
to separate the two issues.                                                                                                     
                                                                                                                                
9:41:22 AM                                                                                                                    
                                                                                                                                
Ms. Blaisdell  offered to return  to the committee  with the                                                                    
needed answers regarding SB 96 and "strings attached".                                                                          
                                                                                                                                
Senator  Olson asked  about native  tribes  and health  care                                                                    
beneficiaries. He  asked if any changes  compromise native's                                                                    
access  to  healthcare.  He  explained  that  Indian  Health                                                                    
Service (IHS)  beneficiaries have  health care  provided for                                                                    
them. He asked  how services are affected  by having "Indian                                                                    
tribes" included  in the legislation's  language on  Page 2,                                                                    
Line 24.                                                                                                                        
                                                                                                                                
Mr.  Putzier believed  that the  amendment's change  regards                                                                    
the method  of child  support orders  between jurisdictions.                                                                    
He did not  believe that the amendment would  have an impact                                                                    
on IHS beneficiaries.                                                                                                           
                                                                                                                                
9:43:37 AM                                                                                                                    
                                                                                                                                
STACY   STEINBERG,   DEPARTMENT   OF  LAW   (testified   via                                                                    
teleconference) stating  that IHS beneficiaries will  not be                                                                    
affected. She  informed that the  cash support  provision of                                                                    
the  bill  adds  to  the existing  law  the  requirement  to                                                                    
consider and  determine if health  care is available  to the                                                                    
children. This  bill adds an  additional piece  stating that                                                                    
during instances  where health  insurance is  unavailable to                                                                    
the children, the agency report  would consider whether cash                                                                    
medical support is then appropriate.  Under the current law,                                                                    
if the children  are eligible for IHS,  then the requirement                                                                    
is met.                                                                                                                         
                                                                                                                                
Senator Thomas asked about the  addition of the language and                                                                    
its impact on employers in  relationship to payment of cash.                                                                    
He  opined that  difficulty in  tracking wages  earned might                                                                    
provide  a problem.  He wondered  if  the legislation  might                                                                    
hold the employers more responsible.                                                                                            
                                                                                                                                
9:46:41 AM                                                                                                                    
                                                                                                                                
Mr.  Mallonee responded  that  an  underground cash  economy                                                                    
exists  where people  work for  unreported wages.  The wages                                                                    
are  attached  to  cash  medical   support.  He  thought  it                                                                    
impossible  to withhold  the income  or  take it  out of  an                                                                    
individual bank account.                                                                                                        
                                                                                                                                
Senator  Thomas asked  if the  state or  federal governments                                                                    
are  erring  by  neglecting  to   approach  the  issue.  Mr.                                                                    
Mallonee  stated  that  the  federal  government  and  child                                                                    
support directors across the nation  have struggled with the                                                                    
problem for some time. A  reporting mechanism does not exist                                                                    
to  address  the   problem,  but  to  date   a  solution  is                                                                    
unavailable.                                                                                                                    
                                                                                                                                
Ms.  Blaisdell  restated  previous questions,  whether  cash                                                                    
medical assistance  is used  strictly for  medical payments.                                                                    
The  second   question  was  whether  the   legislation  was                                                                    
retroactive to preexisting orders or forward funding only.                                                                      
                                                                                                                                
9:48:50 AM                                                                                                                    
                                                                                                                                
Mr. Mallonee  discussed the retroactive question.  With this                                                                    
legislation  a  modification  to   child  support  order  to                                                                    
include the  cash medical support  would not  go retroactive                                                                    
to previous times.  The money does not require  proof of use                                                                    
for  medical  expenses.  Once the  money  is  received,  the                                                                    
custodial  parent  is  then  responsible  for  spending  the                                                                    
money. There is no reason to  report the use of the money to                                                                    
the state.                                                                                                                      
                                                                                                                                
Senator Thomas asked  about Page 1, Line 10  stating "when a                                                                    
person commits  a crime  of aiding  the nonpayment  of child                                                                    
support in  the second degree".  He asked about  the penalty                                                                    
for the crime.                                                                                                                  
                                                                                                                                
Mr.   Mallonee  answered   that   the   penalty  is   felony                                                                    
prosecution for aiding and abetting  the nonpayment of child                                                                    
support. For  the acts  of nonpayment  of child  support the                                                                    
penalties  are either  misdemeanor  or  felony charges.  The                                                                    
legislation  simply places  the  cash medical  support as  a                                                                    
portion of that periodic cash support in that statute.                                                                          
                                                                                                                                
9:51:56 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman asked for  specific examples addressing the                                                                    
inclusion.  Mr.  Mallonee  replied that  the  inclusion  was                                                                    
simply for  cash medical support inserted  in the definition                                                                    
within the particular statute.                                                                                                  
                                                                                                                                
Co-Chair Hoffman  asked if the language  change was required                                                                    
for the  legislature to remain in  conformance. Mr. Mallonee                                                                    
stated that the language change is not required.                                                                                
                                                                                                                                
9:53:02 AM                                                                                                                    
                                                                                                                                
Senator Bettye Davis                                                                                                            
                                                                                                                                
SB  96  was   HEARD  and  HELD  in   Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
                                                                                                                                
9:54:14 AM                                                                                                                    
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 9:54 AM.                                                                                           

Document Name Date/Time Subjects
CSSD_Fed_Compliance_letter_16mar09[1].pdf SFIN 3/30/2009 9:00:00 AM
SB 96
2009 FNSB Resolution.pdf SFIN 3/30/2009 9:00:00 AM
SB 45
Mallonee leter.pdf SFIN 3/30/2009 9:00:00 AM
SB 96
SB96 DORCSSD Letter 032009.pdf SFIN 3/30/2009 9:00:00 AM
SB 96
SB96 DORCSSD Letter 032709.pdf SFIN 3/30/2009 9:00:00 AM
SB 96
SB96 sectional .pdf SFIN 3/30/2009 9:00:00 AM
SB 96
sponsor statement SB 96.doc SFIN 3/30/2009 9:00:00 AM
SB 96
New SB032CS(FIN)-DHSS-RR-03-19-09.pdf SFIN 3/30/2009 9:00:00 AM
SB 32
New SB032CS(FIN)-DHSS-SDMS-03-19-09.pdf SFIN 3/30/2009 9:00:00 AM
SB 32
Proposed CS for SB 32 Version M.pdf SFIN 3/30/2009 9:00:00 AM
SB 32