Legislature(2009 - 2010)SENATE FINANCE 532

04/15/2009 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 113 SUPPLEMENTAL/CAPITAL/OTHER APPROPRIATIONS TELECONFERENCED
Heard & Held
+= HB 199 APPROPS: NON-TRANSPORTATION STIMULUS TELECONFERENCED
Moved SCS CSHB 199(FIN) Out of Committee
+ HB 134 CRUISE SHIP WASTEWATER DISCHARGE PERMITS TELECONFERENCED
Heard & Held
+ HB 26 MEDICAID FOR ADULT DENTAL SERVICES TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  SENATE FINANCE COMMITTEE                                                                                      
                       April 15, 2009                                                                                           
                         9:08 a.m.                                                                                              
                                                                                                                                
9:08:54 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Hoffman called the Senate  Finance Committee meeting                                                                   
to order at 9:08 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Charlie Huggins, Vice-Chair                                                                                             
Senator Johnny Ellis                                                                                                            
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
David  Teal, Director,  Legislative  Finance Division;  Jesse                                                                   
Kiehl,  Staff, Senate  District B;  Karen Rehfeld,  Director,                                                                   
Office  of Management  and Budget,  Office  of the  Governor;                                                                   
Representative  John  Harris;   Larry  Hartig,  Commissioner,                                                                   
Department   of  Environmental   Conservation;  Chip   Thoma,                                                                   
President, Responsible  Cruising in Alaska; Joe  Geldhof, Law                                                                   
Office of  J.W. Geldhof;  John Bitney, Director,  Legislative                                                                   
Office,  Office  of  the  Governor;  Juli,  Lucky,  Staff  to                                                                   
Representative   Hawker;  Brad   Whistler,  Dental   Officer,                                                                   
Department of Health and Social Services.                                                                                       
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Bruce Bustamante,  Vice President,  Princess Tours;  Jennifer                                                                   
Gibbens,  Executive  Director,  Prince  William  Soundkeeper,                                                                   
Cordova.                                                                                                                        
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 26     "An Act repealing the repeal of preventative and                                                                      
          restorative  adult  dental  services  reimbursement                                                                   
          under Medicaid; providing  for an effective date by                                                                   
          repealing  the effective  date of  sec. 3,  ch. 52,                                                                   
          SLA 2006; and providing for an effective date."                                                                       
                                                                                                                                
          HB 26 was HEARD and HELD in Committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
CSHB 113(FIN) am(brf sup maj fld)                                                                                               
          "An Act making supplemental appropriations,                                                                           
          capital appropriations, and other appropriations;                                                                     
          amending appropriations; making appropriations to                                                                     
          capitalize funds; and providing for an effective                                                                      
          date."                                                                                                                
                                                                                                                                
          HB 113 was HEARD and HELD in Committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
CSHB 134(RES)  "An Act  relating to the terms  and conditions                                                                   
          of commercial passenger vessel permits for the                                                                        
          discharge of graywater, treated sewage, and other                                                                     
          wastewater; establishing a science advisory panel                                                                     
          on wastewater treatment and effluent quality in                                                                       
          the Department of Environmental Conservation; and                                                                     
          providing for an effective date."                                                                                     
                                                                                                                                
                                                                                                                                
          CSHB134 was HEARD and HELD in Committee for                                                                           
          further consideration.                                                                                                
                                                                                                                                
CSHB NO. 199(FIN) am                                                                                                            
          "An    Act   making    appropriations,    including                                                                   
          supplemental     appropriations     and     capital                                                                   
          appropriations;   amending    appropriations;   and                                                                   
          providing for an effective     date."                                                                                 
                                                                                                                                
          CSHB NO. 199.(FIN) am was REPORTED out of                                                                             
          Committee with a "do pass" recommendation.                                                                            
                                                                                                                                
CS FOR HOUSE BILL NO. 113(FIN) am(brf sup maj fld)                                                                            
                                                                                                                                
     "An  Act  making  supplemental  appropriations,  capital                                                                   
     appropriations,   and  other  appropriations;   amending                                                                   
     appropriations;  making   appropriations  to  capitalize                                                                   
     funds; and providing for an effective date."                                                                               
                                                                                                                                
9:09:11 AM                                                                                                                    
                                                                                                                                
DAVID   TEAL,   DIRECTOR,   LEGISLATIVE   FINANCE   DIVISION,                                                                   
presented  the  supplemental  budget  via  spreadsheet  dated                                                                   
April 9,  2009, titled  "FY2009 Supplemental Requests"  (Copy                                                                   
on  File). He  offered  to review  the  spreadsheet with  the                                                                   
committee.  He noted that  legislative  items were absent  in                                                                   
the bill,  as every item was  submitted by the  governor. The                                                                   
cost  of the  bill  is noted  on Page  1  with the  operating                                                                   
portion  of  the  supplemental  budget  illustrating  general                                                                   
funds down  $59 million  and federal  funds up $53.6  million                                                                   
reflecting  the substitution  of federal  Medicaid match  for                                                                   
general funds  in the Health  and Social Services  budget. He                                                                   
noted a  net reduction  of $12 million  in the "other  funds"                                                                   
category.                                                                                                                       
                                                                                                                                
9:11:51 AM                                                                                                                    
                                                                                                                                
Mr.  Teal addressed  the  capital  items in  the  legislation                                                                   
illustrated  on  Page 1.  He  explained  the $59  million  in                                                                   
operating  reductions  with  $11.6   million  in  unallocated                                                                   
reductions  viewed  as  savings although  excluded  from  the                                                                   
bill. The total reduction is $70.7  million including capital                                                                   
of $3.2  million creating a  net reduction of  $67.5 million.                                                                   
He explained  that the  process employed  to create  the bill                                                                   
included meetings between House  and Senate staff with agency                                                                   
review  when necessary.  Changes were  made by  the four  co-                                                                   
chairs leading to  the color coded spread sheet  presented to                                                                   
the  committee.  He  explained  that items  coded  green  are                                                                   
included in  the bill,  while items  coded orange are  absent                                                                   
from the legislation.                                                                                                           
                                                                                                                                
9:14:05 AM                                                                                                                    
                                                                                                                                
Mr. Teal  discussed unallocated  operating reductions,  which                                                                   
were  all  rejected  because  there was  no  reason  to  take                                                                   
legislative action  for something  that the executive  branch                                                                   
had  accomplished.   He  noted   that  the  reductions   were                                                                   
categorized   as   savings  in   the   legislation   allowing                                                                   
expectations that  the allocated reductions will  be achieved                                                                   
by  the executive  branch because  they are  included in  the                                                                   
savings category of the fiscal summary.                                                                                         
                                                                                                                                
9:15:36 AM                                                                                                                    
                                                                                                                                
Mr.  Teal addressed  operating lapse  extensions, which  were                                                                   
temporarily  removed from  the supplemental  bill and  put in                                                                   
front  of  the  House  Finance  Committee.  Lapse  extensions                                                                   
typically evade  the scrutiny that other  extensions receive.                                                                   
Some  lapse extensions  were  accepted  and others  rejected.                                                                   
Some extensions went back into  the bill on Page 4, and color                                                                   
coded  orange.  Some  extensions  were  incorporated  in  the                                                                   
operating budget.                                                                                                               
                                                                                                                                
Mr. Teal addressed Page 6 and  specific operating reductions.                                                                   
He explained  the items  not included in  the bill.  He noted                                                                   
page 11, item  61, illustrating five items excluded  from the                                                                   
bill.                                                                                                                           
                                                                                                                                
Mr.  Teal  informed  about  operating   requests,  which  are                                                                   
generally   requests   for   additional   funding   including                                                                   
substitution of federal funds for general funds.                                                                                
                                                                                                                                
9:17:56 AM                                                                                                                    
                                                                                                                                
Mr.  Teal  noted  capital  items beginning  on  Page  34.  He                                                                   
explained  that  most capital  items  were  reappropriations.                                                                   
Rather  than view  a reappropriation  as a  single item,  the                                                                   
choice was split and dead capital  projects no longer in need                                                                   
of money are taken.                                                                                                             
                                                                                                                                
9:18:28 AM                                                                                                                    
                                                                                                                                
Mr. Teal explained that the funds  were placed in the capital                                                                   
income  fund, rather  than  directed immediately  to  another                                                                   
project. In  some cases the capital  income fund was  used to                                                                   
fund supplemental requests. One  project included in the dead                                                                   
projects, Number  218, Page 35, takes money  from the capital                                                                   
project  that was  a legislative  add  on. He  noted that  an                                                                   
amendment will address this number  in the upcoming committee                                                                   
substitute (CS). All capital projects  identified as finished                                                                   
had money  removed from  them except  for the projects  where                                                                   
the  Office   of  Management   and  Budget  (OMB)   submitted                                                                   
amendments reversing the original  request, examples of which                                                                   
begin on Page 43-45.                                                                                                            
                                                                                                                                
9:20:41 AM                                                                                                                    
                                                                                                                                
Mr. Teal  referred to  Page 34 and  the new capital  projects                                                                   
with  a number  of items  included  as supplemental  projects                                                                   
extending through  Page 43 at which point a  few projects are                                                                   
included  that  were  unaccepted  in  the  legislation.  Many                                                                   
supplemental  projects  were later  included  in the  capital                                                                   
budget. He  stated that he did  not know how many  items were                                                                   
added from the governor's original request.                                                                                     
                                                                                                                                
Senator Huggins asked about Page  4, Item 26, and the federal                                                                   
requirement  for  Department  of  Transportation  and  Public                                                                   
Facilities  (DOT).  He  opined  that both  the  in-state  gas                                                                   
pipeline  and   a  larger  pipeline  are  included   in  this                                                                   
appropriation language.                                                                                                         
                                                                                                                                
Mr.  Teal  answered  that  the  mentioned  item  is  a  lapse                                                                   
extension applying to gas line  right of way applications. He                                                                   
explained that funds will lapse  on June 30, 2009 without the                                                                   
lapse  extension  and  the Department  of  Natural  Resources                                                                   
(DNR) states  that a  need for the  money exists.  Either the                                                                   
lapse is extended or a new 2010 appropriation can be made.                                                                      
                                                                                                                                
9:23:28 AM                                                                                                                    
                                                                                                                                
HB  113  was   HEARD  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
9:23:40 AM  AT EASE                                                                                                           
9:54:01 AM  RECONVENED                                                                                                        
                                                                                                                                
CS FOR HOUSE BILL NO. 199(FIN) am                                                                                             
                                                                                                                                
     "An Act making appropriations, including supplemental                                                                      
     appropriations and capital appropriations; amending                                                                        
     appropriations; and providing for an effective date."                                                                      
                                                                                                                                
9:54:12 AM                                                                                                                    
                                                                                                                                
JESSE  KIEHL,  STAFF, SENATE  DISTRICT  B addressed  HB  199,                                                                   
which  appropriates  the non  transportation  stimulus  funds                                                                   
made  available by  the  American Recovery  and  Reinvestment                                                                   
Act.  He  provided  a sectional  analysis.  Section  1  makes                                                                   
appropriations  for  operating  expenses  of  government  and                                                                   
operating grants made to a number  of school districts. These                                                                   
items initially  required answers from the  governor. Section                                                                   
1 totals approximately $118 million  in federal funds with an                                                                   
additional  $40 thousand  of general  funds matching  federal                                                                   
funds  for  health  information   technology.  He  introduced                                                                   
Section  4  containing  items   that  the  governor  accepted                                                                   
without   reservation.   The  committee   as   well  as   its                                                                   
counterpart in the other body  agreed on capital projects and                                                                   
grants.                                                                                                                         
                                                                                                                                
9:57:21 AM                                                                                                                    
                                                                                                                                
Mr. Kiehl  stated that  Section 4  addresses clean  water and                                                                   
storage tanks as well as forestry,  emergency shelter grants,                                                                   
and low income  housing. He mentioned capital  appropriations                                                                   
for the  University of Alaska's  research vessel  through the                                                                   
stimulus act. Section 4 totals  approximately $231 million in                                                                   
federal authority.                                                                                                              
                                                                                                                                
9:58:30 AM                                                                                                                    
                                                                                                                                
Mr. Kiehl  reviewed Section  7 containing  capital items  and                                                                   
grants including  the community development block  grants for                                                                   
diesel emission  reduction programs.  He noted that  one item                                                                   
in   Section  7   from   the  Department   of   Environmental                                                                   
Conservation   (DEC)   requires   an   additional   form   of                                                                   
legislation.                                                                                                                    
                                                                                                                                
9:59:23 AM                                                                                                                    
                                                                                                                                
Mr. Kiehl addressed Section 10  of the bill, which states the                                                                   
legislature's  belief that  the money  is available  one time                                                                   
only and general funds will not  be forthcoming. He noted the                                                                   
legislative  addition  of Section  11,  Page  17 adding  $200                                                                   
thousand of general  funds appropriated to the  Department of                                                                   
Administration  (DOA) for oversight  accounting. The  federal                                                                   
stimulus law requires a great  deal of accountability for the                                                                   
appropriated  funds.   The  federal  government   is  working                                                                   
closely with the legislature's audit division.                                                                                  
                                                                                                                                
10:00:48 AM                                                                                                                   
                                                                                                                                
Mr. Kiehl  reviewed Section  12, and  the receipt of  federal                                                                   
Medicaid  funds should  the match rate  increase. Section  13                                                                   
addresses   additional  federal   funds   available  to   the                                                                   
Department  of Revenue  (DOR) for  child support  collection.                                                                   
The program is  a highly efficient way to use  federal money.                                                                   
The  program was  set  to end,  yet  will continue  with  the                                                                   
stimulus act.                                                                                                                   
                                                                                                                                
Mr.  Kiehl  addressed  Section   14  as  the  largest  single                                                                   
appropriation.   Section    14   appropriates    the   fiscal                                                                   
stabilization  funds existing  in two  categories. This  bill                                                                   
appropriates  $20.7  million  to  Alaska  municipalities  for                                                                   
revenue sharing.                                                                                                                
                                                                                                                                
10:02:05 AM                                                                                                                   
                                                                                                                                
Mr. Kiehl introduced Line 8, Page  19, which appropriates the                                                                   
fiscal   stabilization  Part   A  funds,   $93  million   for                                                                   
education.  He concluded  that  the administration  advocates                                                                   
for  the spending  of stimulus  money only  on items  without                                                                   
ongoing obligations.  He stated  that the governor  will take                                                                   
great care with these funds.                                                                                                    
                                                                                                                                
10:03:43 AM                                                                                                                   
                                                                                                                                
Co-Chair  Hoffman  asked about  the  education  funds of  $93                                                                   
million  and the specific  language required  for the  school                                                                   
districts  agreeing that  the funding  is available  one time                                                                   
only.                                                                                                                           
                                                                                                                                
Mr. Kiehl  answered that  the federal  stimulus law  does not                                                                   
grant power to  require such a signed document.  He noted the                                                                   
legislative  intent   sections,  which  give   Department  of                                                                   
Education  and Early  Development (DEED)  the instruction  as                                                                   
seen on  Page 16,  Line 27. The  legislature's intent  is for                                                                   
DEED  to   ensure  that   the  individual  school   districts                                                                   
understand the nature of the funding.                                                                                           
                                                                                                                                
Co-Chair Stedman MOVED to ADOPT  Amendment 1, 26-GH1260\PA.1,                                                                   
Kane, 4/11/09:  Co-Chair Stedman OBJECTED for  the purpose of                                                                   
discussion.                                                                                                                     
                                                                                                                                
     Page 19, line11:                                                                                                           
                                                                                                                                
          Delete "sec. 144002(a)"                                                                                               
          Insert "sec. 14002(a)(3)"                                                                                             
                                                                                                                                
10:05:35 AM                                                                                                                   
                                                                                                                                
Mr.  Kiehl  explained   Amendment  1.  He  opined   that  the                                                                   
amendment  settles  a  large  question.  He  noted  that  the                                                                   
amendment  takes  effect  on  Page 19,  Line  11  and  simply                                                                   
tightens  the reference  to the  federal  stimulus law  under                                                                   
which  the  $93   million  is  distributed.   He  noted  that                                                                   
Amendment  1  sets  the  policy  call  preferring  the  state                                                                   
distributes  the  funds  to school  districts  as  additional                                                                   
funds using the  same proportions as Title 1.  Title 1 refers                                                                   
to the  elementary and  secondary education  act, which  is a                                                                   
reasonable   method  of  statewide   fund  distribution.   He                                                                   
mentioned  the  lack  of  provision   in  Alaska's  education                                                                   
funding formula  to offset Title  1 money. With  the adoption                                                                   
of  Amendment  1, the  $93  million  will be  distributed  to                                                                   
school districts as additional monies.                                                                                          
                                                                                                                                
Co-Chair  Stedman  WITHDREW  his OBJECTION.  There  being  NO                                                                   
OBJECTION, Amendment 1 was ADOPTED.                                                                                             
                                                                                                                                
Co-Chair Stedman MOVED to ADOPT  Amendment 2, 26-GH1260\PA.3,                                                                   
Kane, 4/14/09: Co-Chair Stedman OBJECTED for discussion.                                                                        
                                                                                                                                
     Page 7, line 26, following "2009":                                                                                         
                                                                                                                                
          Insert "Entitlement Fund and"                                                                                         
                                                                                                                                
Mr. Kiehl  described Amendment  2. He noted  Page 7,  Line 26                                                                   
and a $1  million appropriation of federal  receipt authority                                                                   
placed  in  the  office of  the  governor  reading  "American                                                                   
Recovery and Reinvestment Act."                                                                                                 
                                                                                                                                
10:09:13 AM                                                                                                                   
                                                                                                                                
Mr.  Kiehl  addressed  the  category   of  entitlement  funds                                                                   
applying most  importantly to transportation funding.  In the                                                                   
event that  the state receives  additional money in  the form                                                                   
of an  entitlement, this amendment  allows the state  to take                                                                   
it.  Co-Chair  Stedman  informed  that  the  amendment  is  a                                                                   
technical  amendment to this  amendment by  adding an  "s" to                                                                   
the end of "fund."                                                                                                              
                                                                                                                                
Co-Chair  Stedman  MOVED  to  AMEND  Amendment  2  by  making                                                                   
entitlement fund plural.                                                                                                        
                                                                                                                                
Co-Chair  Stedman WITHDREW  his  OBJECTION.   There being  NO                                                                   
OBJECTION, Amendment 2 was ADOPTED.                                                                                             
                                                                                                                                
10:10:29 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman MOVED to ADOPT  Amendment 3, 26-GH1260\PA.2,                                                                   
Kane, 4/14/09: Co-Chair Stedman OBJECTED for discussion.                                                                        
                                                                                                                                
     Page 12, line 10:                                                                                                          
                                                                                                                                
          Delete "679,900"                                                                                                      
          Insert "679,936"                                                                                                      
                                                                                                                                
     Page 12, line 13:                                                                                                          
                                                                                                                                
          Delete "3,960,000" in both places                                                                                     
          Insert "3,962,565" in both places                                                                                     
                                                                                                                                
     Page 14, line 5:                                                                                                           
                                                                                                                                
          Delete "4,639,900:                                                                                                    
          Insert "4,642,501:                                                                                                    
                                                                                                                                
     Page 14, line 13:                                                                                                          
                                                                                                                                
          Delete "$63,262,600"                                                                                                  
          Insert "$63,265,201"                                                                                                  
                                                                                                                                
     Page 15, line 7:                                                                                                           
                                                                                                                                
          Delete "63,262,600"                                                                                                   
          Insert "63,265,201"                                                                                                   
                                                                                                                                
Mr. Kiehl  described Amendment  3 as  a housekeeping  effort,                                                                   
which simply updates dollar amounts.                                                                                            
                                                                                                                                
Co-Chair  Stedman  WITHDREW  his OBJECTION.  There  being  NO                                                                   
OBJECTION, Amendment 3 was ADOPTED.                                                                                             
                                                                                                                                
10:12:57 AM  AT EASE                                                                                                          
10:14:26 AM  RECONVENED                                                                                                       
                                                                                                                                
KAREN  REHFELD, DIRECTOR,  OFFICE OF  MANAGEMENT AND  BUDGET,                                                                   
OFFICE  OF  THE  GOVERNOR,  expressed  appreciation  for  the                                                                   
efforts  of both  bodies in  reviewing  the federal  stimulus                                                                   
bill. She  agreed that the  policy questions were  important.                                                                   
She  noted  that   it  is  allowable  to  make   use  of  the                                                                   
stabilization funds for the school  funding formula increases                                                                   
based on  the timing and  statutory language of  the American                                                                   
Recovery  and Reinvestment  Act.  Given  the current  revenue                                                                   
shortfall,  which was not  the case  when the school  funding                                                                   
bill  was  passed, it  is  appropriate  to bring  the  policy                                                                   
questions   forward.  She  felt   the  recommendations   were                                                                   
appropriate  for consideration.  Another policy decision  was                                                                   
chosen as indicated by the amendment proposed.                                                                                  
                                                                                                                                
10:16:20 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman clarified that  the previous finance meeting                                                                   
included recommended administrative  amendments that were not                                                                   
brought forward. (Copy on File)  He apologized to Ms. Rehfeld                                                                   
for  falling out  of  order  yesterday. He  acknowledged  Ms.                                                                   
Rehfeld  for  the  amount  of   effort  she  contributes.  He                                                                   
commended Ms. Rehfeld's staff  for their work on the stimulus                                                                   
bill policy discussions.                                                                                                        
                                                                                                                                
Co-Chair  Hoffman MOVED  to report  HB 199  out of  Committee                                                                   
with individual  recommendations and the  accompanying fiscal                                                                   
note. There being NO OBJECTION, it was so ordered.                                                                              
                                                                                                                                
CSHB NO.  199.(FIN) am was REPORTED  out of Committee  with a                                                                   
"do pass" recommendation.                                                                                                       
                                                                                                                                
10:18:13 AM  AT EASE                                                                                                          
10:21:42 AM  REONVENED                                                                                                        
                                                                                                                                
CS FOR HOUSE BILL NO. 134(RES)                                                                                                
                                                                                                                                
     "An  Act  relating  to  the   terms  and  conditions  of                                                                   
     commercial  passenger vessel  permits for the  discharge                                                                   
     of  graywater,  treated sewage,  and  other  wastewater;                                                                   
     establishing  a  science  advisory panel  on  wastewater                                                                   
     treatment  and effluent  quality  in  the Department  of                                                                   
     Environmental   Conservation;  and   providing  for   an                                                                   
     effective date."                                                                                                           
                                                                                                                                
10:22:00 AM                                                                                                                   
                                                                                                                                
Co-Chair  Hoffman  MOVED  to ADOPT  work  draft  26-LS0570\D,                                                                   
Bullard,  4/14/09.  There  being  NO  OBJECTION,  it  was  so                                                                   
ordered.                                                                                                                        
                                                                                                                                
REPRESENTATIVE JOHN  HARRIS, spoke about the  legislation and                                                                   
the  Committee  Substitute (CS).  He  explained  that the  CS                                                                   
eliminates   five   words.   He  revealed   that   the   last                                                                   
modification addresses  the quality of water  discharged from                                                                   
the  ships  into  Alaska  waters. He  informed  that  the  CS                                                                   
includes a six  year sunset and allows a scientific  panel to                                                                   
meet  every three  years in  a  six year  period rather  than                                                                   
every two.                                                                                                                      
                                                                                                                                
10:24:17 AM                                                                                                                   
                                                                                                                                
LARRY  HARTIG,  COMMISSIONER,   DEPARTMENT  OF  ENVIRONMENTAL                                                                   
CONSERVATION,  testified on  SCSCSHB 134  (FIN). He  informed                                                                   
that  the  goal  is to  maintain  Alaska's  clean  water.  He                                                                   
expressed appreciation  from the Department  of Environmental                                                                   
Conservation  (DEC) over  the  last few  weeks  to work  with                                                                   
Representative Harris  on the bill. With the  bill's passage,                                                                   
DEC will  be able  to protect  Alaska waters while  providing                                                                   
temporary relief  to the cruise ship industry.  One important                                                                   
decision requires  the cruise ships  to reduce the  amount of                                                                   
pollutants in  their waste before  they discharge it  so that                                                                   
they  meet  state water  quality  criteria  at the  point  of                                                                   
discharge or as soon as it leaves  the vessel. He mentioned a                                                                   
technology conference several  months ago sponsored by DEC to                                                                   
review the potential  technologies available to  treat cruise                                                                   
ship waste. He  explained that the conference  confirmed that                                                                   
technologies  are unavailable  at this  time to allow  cruise                                                                   
ships   to  consistently   meet   the  point   of   discharge                                                                   
requirement.  He  noted  that   the  quality  of  the  ship's                                                                   
effluent  is high  relative to  other  dischargers, but  they                                                                   
have  not  yet  achieved  the  goal  of  the  initiative.  He                                                                   
explained  that  the  legislation  allows  the  cruise  ships                                                                   
additional time (six years) to  achieve the goal with interim                                                                   
steps. The steps  include a science advisory  panel of eleven                                                                   
experts who  would work with DEC  to review the  records that                                                                   
the  cruise  ship   companies  present.  A  report   will  be                                                                   
presented to  the legislature following the  conferences. The                                                                   
six year sunset date will be readdressed  through the process                                                                   
to assess the necessary time span.                                                                                              
                                                                                                                                
10:28:02 AM                                                                                                                   
                                                                                                                                
Mr. Hartig  provided a  sectional analysis  of the  bill. The                                                                   
intent section  (Section 1) states the initiative  to achieve                                                                   
the at the point of discharge  requirements. Section 2 allows                                                                   
"the   waiver  provision"   from  the   point  of   discharge                                                                   
requirement   stating  that  cruise   ships  must   meet  the                                                                   
requirement except as provided  in Section E below the waiver                                                                   
provision.  Section 3  eliminates the  waiver provision  with                                                                   
the idea that Section 2 becomes  effective on passage of this                                                                   
act after  the six year sunset  allowing Section 3  to remove                                                                   
the waiver.                                                                                                                     
                                                                                                                                
10:29:29 AM                                                                                                                   
                                                                                                                                
Mr. Hartig revealed  that Section 4 describes  the waiver and                                                                   
how the  cruise ship companies  comply. The conditions  state                                                                   
that the  companies must employ  the treatment  measures that                                                                   
are technologically effective  and economically achievable in                                                                   
waste reduction.  The waiver  can only  be granted  for three                                                                   
years at a time. With the six  year sunset, DEC would issue a                                                                   
new permit in  the spring of 2010 followed  by the technology                                                                   
conference  to review  the information  from  the last  three                                                                   
years.                                                                                                                          
                                                                                                                                
10:33:21 AM                                                                                                                   
                                                                                                                                
Mr.  Hardig informed  that Section  5  addresses the  science                                                                   
advisory panel described  earlier. He shared a  story about a                                                                   
dilution study  assisted by a science panel.  Representatives                                                                   
from   various   interested  groups   comprise   the   panel,                                                                   
particularly  from  coastal  groups with  interest  in  water                                                                   
quality matters.                                                                                                                
                                                                                                                                
Subsection B under Section 5 described  the reports presented                                                                   
to  the legislature  from  DEC with  input  from the  science                                                                   
panel.  The  reports  allow the  legislature  to  assess  the                                                                   
science panel's findings prior  to issuing the new three year                                                                   
permit.  He noted  the  final report  due  2015 allowing  the                                                                   
sunset  provision to  "kick in"  or to take  other action  if                                                                   
necessary.                                                                                                                      
                                                                                                                                
10:35:05 AM                                                                                                                   
                                                                                                                                
Mr. Hartig noted that the sunset  provisions are contained in                                                                   
Section 7  and 8. Section  8 provides  that Sections 3  and 7                                                                   
take effect December 31, 2015.                                                                                                  
                                                                                                                                
Senator Ellis MOVED to ADOPT Amendment 1:                                                                                       
                                                                                                                                
     Page 3, line 11                                                                                                            
        Insert after "using" "economically feasible"                                                                            
                                                                                                                                
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          Delete "and economically feasible"                                                                                    
                                                                                                                                
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       Insert after "use of" "economically feasible"                                                                            
                                                                                                                                
     Page 3, lines 19-20                                                                                                        
          Delete "and economically feasible"                                                                                    
                                                                                                                                
     Page 4, line 29                                                                                                            
          Insert after "additional" "economically feasible"                                                                     
                                                                                                                                
     Page 4, lines 30-31                                                                                                        
          Delete "and economically feasible"                                                                                    
                                                                                                                                
Co-Chair Stedman OBJECTED for the purpose of discussion.                                                                        
                                                                                                                                
Senator Ellis explained the amendment.  He clarified that the                                                                   
amendment does  technically comport  and is accurate  for the                                                                   
finance  CS.   This  amendment  makes  small   but  important                                                                   
language changes  to the bill. He explained  that the current                                                                   
language  requires  DEC to  impose  cruise ship  waste  water                                                                   
technologies  that  are both  technologically  effective  and                                                                   
economically feasible.                                                                                                          
                                                                                                                                
Co-Chair  Stedman  WITHDREW  his OBJECTION.  There  being  NO                                                                   
OBJECTION, it was so ordered. Amendment 1 was ADOPTED.                                                                          
                                                                                                                                
10:37:50 AM                                                                                                                   
                                                                                                                                
Senator  Olson   asked  about  infective  particles   in  the                                                                   
discharge  such  as  living  viruses.  Representative  Harris                                                                   
asked for clarification of the  question. Senator Olson asked                                                                   
if  particles  such  as  living   viruses  and  bacteria  are                                                                   
neutralized.  His question  was  whether  these bacteria  and                                                                   
viruses are discharged into the water from the cruise ship.                                                                     
                                                                                                                                
Mr. Hartig  stated that  when a  cruise ship company  applies                                                                   
for a permit, they must disclose  the content of their waste.                                                                   
The DEC  then reviews the  application and compares  the data                                                                   
with state  water quality  standards including provisions  to                                                                   
protect human  health. If some  portion of the data  does not                                                                   
meet  the  standard,  DEC  sets   a  permit  limit  or  other                                                                   
conditions  that  preclude or  limit  the discharge  of  that                                                                   
particular pollutant. A cruise  ship's permit includes a list                                                                   
of prohibitions.                                                                                                                
                                                                                                                                
Senator Olson  asked about ballast  water. Mr.  Hartig stated                                                                   
that  ballast water  is not  addressed  in this  legislation,                                                                   
which only concerns water discharged from the ships.                                                                            
                                                                                                                                
10:40:47 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman opened public testimony.                                                                                       
                                                                                                                                
CHIP  THOMA,  PRESIDENT,  RESPONSIBLE   CRUISING  IN  ALASKA,                                                                   
testified in support of HB 134.  He maintained that discharge                                                                   
from the cruise ships is caustic.  He noted that the soap and                                                                   
other  products discharged  are  the reason  for the  caustic                                                                   
discharge.  He addressed  the six  year sunset  based on  the                                                                   
year 2009.  He compared  the difference  between the  federal                                                                   
standards  and the  sunset. He  announced  that Princess  and                                                                   
Holland America  cruise lines have serious problems  with the                                                                   
piping  on  board the  ships.  The  other cruise  ship  lines                                                                   
operating  in  Alaska  are  close  to  achieving  full  water                                                                   
quality  standards  as  defined  by  the  2010  limits.  Only                                                                   
Princess and Holland  America have refused to  exchange their                                                                   
pipes, which is the stem root  of the problem. He opined that                                                                   
the sunset could be shorter while remaining effective.                                                                          
                                                                                                                                
10:44:23 AM                                                                                                                   
                                                                                                                                
JOE  GELDOHOF,  LAW  OFFICE OF  J.W.  GELDHOF,  testified  in                                                                   
support of HB 134. He noted that  he was one of the principle                                                                   
authors  of  the  initiative  that became  law  in  2006.  He                                                                   
complimented the  compromises in this legislation.  He opined                                                                   
that   the    bill   was    acceptable   to   industry    and                                                                   
environmentalists alike.                                                                                                        
                                                                                                                                
BRUCE BUSTAMANTE,  VICE PRESIDENT, PRINCESS  TOURS (testified                                                                   
via teleconference)  in support of  HB 134. He  commended the                                                                   
process  and the time  given to  work on  the issue  with the                                                                   
science  panel.  He  stated  that   the  point  of  discharge                                                                   
component is  unfair to the  cruise industry. He  stated that                                                                   
the allegations  regarding the  replacement of copper  piping                                                                   
are not  true. The allegations  result from accusations  that                                                                   
Princess Cruise Line has older  ships and he stated that this                                                                   
is  not true.  He  stated that  the  piping  on the  Princess                                                                   
cruise ships is comprised of stainless  steel and not copper.                                                                   
                                                                                                                                
10:49:08 AM                                                                                                                   
                                                                                                                                
JENNIFER   GIBBENS,   EXECUTIVE  DIRECTOR,   PRINCE   WILLIAM                                                                   
SOUNDKEEPER,  CORDOVA  (testified   via  teleconference),  in                                                                   
support  of  the  legislation.  She opined  that  the  sunset                                                                   
granted was generous. She encounters  many citizens concerned                                                                   
about the  clean water  issue. She stated  that she  can view                                                                   
the issue  from both  environmental and tourism  standpoints.                                                                   
She opined  that the  legislation was crafted  in a  fair and                                                                   
generous fashion including an important deadline.                                                                               
                                                                                                                                
10:51:12 AM                                                                                                                   
                                                                                                                                
SCSCSHB134  was  HEARD  and HELD  in  Committee  for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
HOUSE BILL NO. 26                                                                                                             
                                                                                                                                
     "An  Act  repealing  the   repeal  of  preventative  and                                                                   
     restorative  adult dental  services reimbursement  under                                                                   
     Medicaid; providing  for an effective date  by repealing                                                                   
     the  effective date  of sec.  3, ch. 52,  SLA 2006;  and                                                                   
     providing for an effective date."                                                                                          
                                                                                                                                
10:52:01 AM                                                                                                                   
                                                                                                                                
                                                                                                                                
JULI,  LUCKY, STAFF  TO REPRESENTATIVE  HAWKER, reviewed  the                                                                   
bill.  She  noted  that  the   bill  presented  a  preventive                                                                   
approach  to dental  care.  She  explained that  the  current                                                                   
legislation allows  coverage of incidence including  pain and                                                                   
infection and  preventive care was not  included. Restorative                                                                   
care such  as fillings  or root canals  was also  exempt from                                                                   
coverage.  The proposed legislation  covers preventive  care,                                                                   
root canals, fillings and dentures.                                                                                             
                                                                                                                                
10:54:52 AM                                                                                                                   
                                                                                                                                
BRAD WHISTLER  DDS, DENTAL OFFICER, DEPARTMENT  OF HEALTH AND                                                                   
SOCIAL SERVICES, explained the  coverage allowed by the bill.                                                                   
He agreed  that the  legislation allows  coverage of  routine                                                                   
dental   visits,   routine   fillings,    denture   services,                                                                   
periodontal maintenance, and root canal therapy.                                                                                
                                                                                                                                
Co-Chair  Hoffman asked  if Alaska natives  are eligible  for                                                                   
dental care  through Medicaid.  Mr. Whistler answered  yes as                                                                   
long as the individuals are enrolled in Medicaid.                                                                               
                                                                                                                                
Senator Ellis  requested more information  regarding Medicaid                                                                   
and dentures.  Mr. Whistler  explained  that an annual  limit                                                                   
per recipient  was set  at $1,150, which  is enough  to cover                                                                   
either an upper or a lower denture.                                                                                             
                                                                                                                                
10:57:26 AM                                                                                                                   
                                                                                                                                
Senator  Olson  asked  what  happens  during  an  abscess  or                                                                   
detrimental  problem that  might  prove  fatal. Mr.  Whistler                                                                   
stated that  these situations are  not subject to  the annual                                                                   
limit.                                                                                                                          
                                                                                                                                
Senator Thomas  noted that missed appointments  with Medicaid                                                                   
patients are  a common complaint  from dentists. He  asked if                                                                   
there was an  attempt to ameliorate this issue.  Mr. Whistler                                                                   
responded that  the department addressed a variety  of issues                                                                   
with the Medicaid  program. The issue of  missed appointments                                                                   
can be  addressed by tracking  those patients  who repeatedly                                                                   
miss  appointments.  Senator  Thomas  opined  that  a  proper                                                                   
provision might deter a patient from missing appointments.                                                                      
                                                                                                                                
11:00:09 AM                                                                                                                   
                                                                                                                                
Ms.  Lucky noted  that  the caps  were  not  altered in  this                                                                   
legislation. She explained that  the prior committees were in                                                                   
agreement  about a policy  call regarding  the annual  limit.                                                                   
She explained  that one set of  dentures was decided  upon as                                                                   
the other  body was concerned  that costs may balloon  out of                                                                   
control. She acknowledged those  people who believed that the                                                                   
program  is new  and should  proceed  for a  couple of  years                                                                   
prior to changing the cap.                                                                                                      
                                                                                                                                
Co-Chair  Stedman   mentioned  the   fiscal  note   from  the                                                                   
Department   of  Health   and   Social  Services   reflecting                                                                   
$2,529,700  general  fund  to secure  $5,755,800  in  federal                                                                   
receipts as  funding for the  general fund match.  The fiscal                                                                   
note is included in the FY10 operating budget.                                                                                  
                                                                                                                                
HB  26   was  HEARD  and   HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
11:02:29 AM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 11:02 AM.                                                                                          

Document Name Date/Time Subjects
ACA backup.pdf SFIN 4/15/2009 9:00:00 AM
HB 134
4 9 9 Supplemental.pdf SFIN 4/15/2009 9:00:00 AM
HB 113
HB026 Background Materials.pdf SFIN 4/15/2009 9:00:00 AM
HB 26
HB026 Sectional Analysis.pdf SFIN 4/15/2009 9:00:00 AM
HB 26
HB026 Sponsor Statement.pdf SFIN 4/15/2009 9:00:00 AM
HB 26
HB026 Testimony.pdf SFIN 4/15/2009 9:00:00 AM
HB 26
Cruise Ship Discharge Assessment Report.pdf SFIN 4/15/2009 9:00:00 AM
HB 134
Governor's reponse to Harris 19 March 2009.pdf SFIN 4/15/2009 9:00:00 AM
HB 134
Harris letter to governor 11 March 2009.pdf SFIN 4/15/2009 9:00:00 AM
HB 134
Hearing Request and Sponsor Statement.pdf SFIN 4/15/2009 9:00:00 AM
HB 134
HB134 Letters.pdf SFIN 4/15/2009 9:00:00 AM
HB 134
HB 134 Amendment 1 SFC.pdf SFIN 4/15/2009 9:00:00 AM
HB 134
SCS CSHB 134 (FIN) Version D.pdf SFIN 4/15/2009 9:00:00 AM
HB 134
SFC HB 199 Amendment 1 PA 1.pdf SFIN 4/15/2009 9:00:00 AM
HB 199
SFC HB 199 Amendment 2 PA 3.pdf SFIN 4/15/2009 9:00:00 AM
HB 199
SFC HB 199 Amendment 3 PA.2.pdf SFIN 4/15/2009 9:00:00 AM
HB 199
Timeline by DEC.pdf SFIN 4/15/2009 9:00:00 AM
HB 134