Legislature(2013 - 2014)SENATE FINANCE 532

03/18/2014 09:00 AM FINANCE

Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
Heard & Held
Moved CSSB 108(JUD) Out of Committee
                 SENATE FINANCE COMMITTEE                                                                                       
                      March 18, 2014                                                                                            
                         9:06 a.m.                                                                                              
9:06:05 AM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Meyer  called the Senate Finance  Committee meeting                                                                    
to order at 9:06 a.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Kevin Meyer, Co-Chair                                                                                                   
Senator Anna Fairclough, Vice-Chair                                                                                             
Senator Click Bishop                                                                                                            
Senator Mike Dunleavy                                                                                                           
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
MEMBERS ABSENT                                                                                                                
ALSO PRESENT                                                                                                                  
Senator Fred  Dyson; Chuck Kopp, Staff,  Senator Fred Dyson;                                                                    
Laura  Brooks,  Heath   Care  Administrator,  Department  of                                                                    
Corrections;   Robert   Lawrence,  Doctor,   Chief   Medical                                                                    
Officer,  Department  of  Corrections;  Representative  Mark                                                                    
Neuman; Suzanne Armstrong, Staff, Senator Kevin Meyer.                                                                          
PRESENT VIA TELECONFERENCE                                                                                                    
Dave Powers,  Doctor, Bristol Bay Health,  Dillingham; Henry                                                                    
Phillips,  Doctor,   Teladoc,  Nashville;   Sheela  Tallman,                                                                    
Premera Blue Cross Blue Shield,  Seattle; Ron Hale, Hospital                                                                    
Administration,  Alaska  Psychiatric  Institute,  Anchorage;                                                                    
Carly  Wier, Self,  Anchorage;  Lorali  Simon, Usibeli  Coal                                                                    
Mine, Healy.                                                                                                                    
SCR 16    REQ GOV TO INVESTIGATE COAL RESOURCES                                                                                 
          SCR  16  was  HEARD  and  HELD  in  committee  for                                                                    
          further consideration.                                                                                                
SB 80     OUT-OF-STATE PHYSICIAN LICENSE                                                                                        
          SB 80 was HEARD and  HELD in committee for further                                                                    
SB 108    LIMIT PUBLIC ACCESS TO CRIMINAL RECORDS                                                                               
          SB 108  was REPORTED out  of committee with  a "do                                                                    
          pass"    recommendation   and    with   previously                                                                    
          published zero  fiscal notes:  FN1(LAW), FN2(ADM),                                                                    
          and  FN3(ADM); a  new zero  fiscal  note from  the                                                                    
          Department of  Health and  Social Services;  and a                                                                    
          new  fiscal  impact  note from  the  Alaska  Court                                                                    
2d CSHB 23(RLS)                                                                                                                 
          KNIK ARM CROSSING; AHFC                                                                                               
          2d CSHB  23(RLS) was HEARD  and HELD  in committee                                                                    
          for further consideration.                                                                                            
SENATE BILL NO. 108                                                                                                           
     "An Act relating to the confidentiality of certain                                                                         
     records of criminal cases; and providing for an                                                                            
     effective date."                                                                                                           
9:07:31 AM                                                                                                                    
Co-Chair Meyer  communicated that the bill  introduction and                                                                    
public testimony had been heard the previous day.                                                                               
SENATOR  FRED  DYSON,  SPONSOR  thanked  the  committee  for                                                                    
hearing the bill. He was available to answer questions.                                                                         
Senator Olson  observed that public testimony  the prior day                                                                    
had been  overwhelmingly in favor  of the bill.  He wondered                                                                    
if any opposition had been  expressed. Senator Dyson replied                                                                    
that  the only  active  opposition was  from  the Office  of                                                                    
Victim's Rights.  The office was  concerned that  the public                                                                    
information  on  CourtView  helped individuals  to  identify                                                                    
potential  patterns   of  bad  behavior.  The   sponsor  had                                                                    
provided  a workaround  with the  Department  of Health  and                                                                    
Social Services  (DHSS) that would allow  the agency through                                                                    
training  to  gain access  to  confidential  records if  the                                                                    
legislation passed. He asked his staff to elaborate.                                                                            
CHUCK KOPP,  STAFF, SENATOR FRED  DYSON, explained  that the                                                                    
exception of access to information  made confidential by the                                                                    
legislation had  been brought to  the sponsor by  the Office                                                                    
of Public  Advocacy and  DHSS. The  entities had  asked that                                                                    
persons  responsible for  the safety  and  welfare of  child                                                                    
placement, vulnerable adults,  and seniors with disabilities                                                                    
have  access to  the information  for the  placement of  the                                                                    
individuals.  Additionally,  individuals who  currently  had                                                                    
access to the Alaska  Public Safety Information Network (the                                                                    
state  criminal justice  information system)  would continue                                                                    
to  have access  to the  information. The  amendment to  the                                                                    
bill had  been made in Section  2. He noted that  the change                                                                    
had resulted in a fiscal note from the Alaska Court System.                                                                     
Senator Dyson  advised that there would  always be pragmatic                                                                    
reasons to trample on personal  liberties and Bill of Rights                                                                    
issues. He  acknowledged that  decisions would  be difficult                                                                    
due to  heartfelt testimony on  the downsides  of particular                                                                    
personal liberties.  He believed  the legislature  needed to                                                                    
be vigilant about upholding  personal liberties. The current                                                                    
issue was related to privacy and due process.                                                                                   
9:12:08 AM                                                                                                                    
Co-Chair  Kelly  MOVED  to  REPORT   CSSB  108(JUD)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
CSSB  108(JUD) was  REPORTED  out of  committee  with a  "do                                                                    
pass"  recommendation  and  with previously  published  zero                                                                    
fiscal notes: FN1  (LAW), FN2 (ADM), and FN3  (ADM); one new                                                                    
zero fiscal  note from the  Department of Health  and Social                                                                    
Services; and  one new  fiscal impact  note from  the Alaska                                                                    
Court System.                                                                                                                   
9:12:18 AM                                                                                                                    
AT EASE                                                                                                                         
9:13:50 AM                                                                                                                    
SENATE BILL NO. 80                                                                                                            
     "An Act  relating to the  practice of  telemedicine and                                                                    
     relating  to licenses  for  out-of-state physicians  or                                                                    
     podiatrists  to  practice  telemedicine in  this  state                                                                    
     under certain circumstances."                                                                                              
9:14:16 AM                                                                                                                    
Senator Dyson explained that SB  80 introduced into Alaska's                                                                    
Medical  Practice Act  the  practice  of telemedicine,  sets                                                                    
parameters   for  prescription   of  controlled   substances                                                                    
without an in-person contact  between physician and patient,                                                                    
establishes  a  definition  for telemedicine,  and  provides                                                                    
that health care insurers may  not require in-person contact                                                                    
between a  health care provider  and patient  before payment                                                                    
is made for  services. With Alaska's large  rural and remote                                                                    
areas, the  need for telemedicine  is especially  acute with                                                                    
much  of the  state designated  as medically  underserved by                                                                    
the  federal Health  Resources and  Services Administration.                                                                    
The  legislation  will   provide  expanded  opportunity  for                                                                    
health   care  delivery   for  individuals   and  businesses                                                                    
throughout   Alaska.  Currently,   the   only  delivery   of                                                                    
telehealth in Alaska  is via the Alaska  Federal Health Care                                                                    
Access  Network (AFHCAN),  established  in  1998 to  provide                                                                    
telehealth  services for  federal  beneficiaries in  Alaska,                                                                    
including Alaska  Natives. The  Alaska Native  Tribal Health                                                                    
Care Consortium  (ANTHC) manages the telehealth  program and                                                                    
provided   statewide  health   and  information   technology                                                                    
services  to   Alaska  Natives  and  American   Indians,  in                                                                    
additions   to   supporting    the   local   tribal   health                                                                    
organizations.  The  bill  will allow  the  cost-saving  and                                                                    
efficiencies  of  telehealth to  be  delivered  to the  many                                                                    
other  constituencies  in  Alaska  that do  not  qualify  to                                                                    
participate in  the ANTHC telehealth program.  In Alaska and                                                                    
nationwide,  the  ongoing  discussion   of  how  to  provide                                                                    
greater  access  to health  care  at  a reasonable  cost  is                                                                    
becoming ever  more relevant. Telemedicine is  emerging as a                                                                    
key element in the delivery  of health services to children,                                                                    
seniors,  and  other   vulnerable  populations  through  the                                                                    
integration  of technology  and  provider  car. The  Patient                                                                    
Protection and  Affordable Care Act is  leading to increased                                                                    
demand   that  physicians   interact  with   more  patients.                                                                    
Telemedicine   allows  physicians   to  consult   with  more                                                                    
patients,   and  enables   patients  to   meet  with   their                                                                    
physicians in  a shorter time  period. In terms  of economic                                                                    
advantages, telemedicine  saves travel time and  expense for                                                                    
patients who otherwise have to leave  home and work to see a                                                                    
health care provider, provides for  more timely diagnosis of                                                                    
ailments, and reduces unnecessary ER visits.                                                                                    
9:19:24 AM                                                                                                                    
Mr. Kopp stated that the  build out recipient of the state's                                                                    
broadband  network  in  Southwest  and  Western  Alaska  the                                                                    
ANTHC, which created the Alaska  Federal Health Care Network                                                                    
expanding telemedicine statewide. He  announced that GCI had                                                                    
employees  in   very  remote   locations,  and   were  using                                                                    
telemedicine. The  physicians were given a  Cease and Desist                                                                    
order,  because, under  state  regulations, prescription  of                                                                    
medication or diagnosis of a  patient must not be done based                                                                    
solely  on  a  patient-supplied  history.  In  order  for  a                                                                    
physician  to prescribe  medication,  there must  be an  in-                                                                    
person  visit. He  stressed that  the  regulations were  old                                                                    
fashioned,  and  enacted  before  telehealth  was  advanced.                                                                    
Alaska  Natives  and  federal entities  had  access  to  the                                                                    
current telehealth network, but  others would not be allowed                                                                    
access.  The legislation  sought  to allow  those people  to                                                                    
take part  in the telehealth  network. He stressed  that the                                                                    
cost of  a trip to  a medical  clinic for some  Alaskans was                                                                    
extremely  expensive.   He  pointed   out  that   the  ANTHC                                                                    
announced  that telehealth  had  saved over  $10 million  in                                                                    
travel  costs  for  the  clientele  that  were  served.  The                                                                    
legislation   introduced  into   statute  the   practice  of                                                                    
telemedicine. The  sponsor met twice with  the State Medical                                                                    
Board,  and had  conversations  to conclude  on the  current                                                                    
language  in the  bill.  He stated  that  the Department  of                                                                    
Corrections  (DOC)   requested  an  exception   to  continue                                                                    
prescribe controlled  substances electronically, due  to the                                                                    
DOC diversity  that were going  through withdrawals  or have                                                                    
behavioral disorders while incarcerated.                                                                                        
9:22:57 AM                                                                                                                    
Mr.  Kopp  stated that  the  bill  was  in line  with  other                                                                    
states'  that  allowed  for physical  examinations  to  take                                                                    
place  electronically:  California,  Kansas,  Maryland,  New                                                                    
Mexico,  Ohio, Texas,  Vermont,  Hawaii, Louisiana,  Nevada,                                                                    
North  Carolina, South  Dakota, and  Virginia. He  presented                                                                    
the sectional analysis (copy on file):                                                                                          
     Section 1 - Adds a new section in the Medical Practice                                                                     
     Act   (AS   08.64)   establishing   the   practice   of                                                                    
     telemedicine. Remains unchanged.                                                                                           
     Section  2  -  Clarifies   how  prescription  of  drugs                                                                    
     without a  physical examination is to  occur by setting                                                                    
     three requirements: 1) the prescription  drug is not to                                                                    
     be a controlled substance,  2) the physician is located                                                                    
     in the  state and able  to provide follow-up  care, and                                                                    
     3) the person consents to  sending a copy of records of                                                                    
     the  encounter to  their primary  care provider  if the                                                                    
     prescribing  physician   is  not  their   primary  care                                                                    
     provider  and the  physician sends  the records  to the                                                                    
     primary care  provider. It deletes the  license for out                                                                    
     of   state   physician   or  podiatrist   to   practice                                                                    
     Section 3  - Creates a  definition for the  practice of                                                                    
     telemedicine by  adding a new paragraph  to the Medical                                                                    
     Practice  Act's  definition  section AS  08.64.380.  It                                                                    
     deletes the  langrage pertaining to  personal interview                                                                    
     requirements for  physician licensure  for out-of-state                                                                    
     telemedicine license.                                                                                                      
     Section 4 -  Adds a new section to  the state insurance                                                                    
     code  and  provides  that  an  insurance  company  that                                                                    
     offers  a  health  care insurance  plan  that  provides                                                                    
     coverage for  telemedicine may  not require  that prior                                                                    
     in  person contact  occur  between  doctor and  patient                                                                    
     before  payment  is  made   for  covered  services.  It                                                                    
     deletes the  language amending the license  fee statute                                                                    
     and add an out-of-state license fee.                                                                                       
     Section   5   -   Provides  an   effective   date   for                                                                    
     applicability of new section  AS 21.54.102 dealing with                                                                    
     health care insurance plans.                                                                                               
9:26:28 AM                                                                                                                    
Senator  Olson queried  the reason  the physician  should be                                                                    
located  within  the  state. Mr.  Kopp  responded  that  the                                                                    
provision  was  included,  because  the  physician  must  be                                                                    
available for follow-up care.                                                                                                   
Senator Olson wondered  if he could treat  patients while on                                                                    
vacation.  Mr.   Kopp  responded  that   medical  regulation                                                                    
already  provided exception  for existing  physician-patient                                                                    
Senator Olson  felt that Section  2 allowed  for prescribing                                                                    
medication without a physical  examination. Mr. Kopp replied                                                                    
that there an exception already outlined in regulation.                                                                         
Senator Dyson  furthered that the  Medical Board  was fairly                                                                    
conservative,  and there  was  some  concern regarding  some                                                                    
large   national  firms   that  were   currently  practicing                                                                    
telemedicine nationwide. He remarked  that the medical board                                                                    
wanted   to   preserve    the   traditional   doctor/patient                                                                    
Senator  Olson wondered  if the  Alaska Medical  Association                                                                    
was  supportive of  the legislation.  Mr. Kopp  replied that                                                                    
the  board  may  be  neutral, and  may  be  supportive.  The                                                                    
Association did  not support  the out-of-state  licensing of                                                                    
Senator  Olson  asked  if the  Alaska  State  Medical  Board                                                                    
supported the  bill. Mr. Kopp  replied that the  Board asked                                                                    
for  the removal  of  out-of-state  licensing. He  furthered                                                                    
that the sponsor had been  working with the association, and                                                                    
he  believed that  the  association was  in  support of  the                                                                    
Senator  Olson queried  the position  of the  Alaska Medical                                                                    
Association. Mr.  Kopp responded  that they  were supportive                                                                    
of the legislation.                                                                                                             
Senator Olson  asked for  the position  of the  Alaska State                                                                    
Medical  Board.  Mr.  Kopp replied  that  they  were  either                                                                    
neutral  or  in  support,  but  not  in  opposition  to  the                                                                    
9:31:17 AM                                                                                                                    
Senator Olson wondered if there  were conversations with the                                                                    
rural  providers  to  see how  they  view  the  legislation.                                                                    
Senator Dyson replied that he  believed there was enthusiasm                                                                    
from the rural communities and rural medical centers.                                                                           
Senator  Olson   stressed  that  there  were   some  private                                                                    
physicians  that  were  treating patients.  He  queried  the                                                                    
position of  these private providers. Mr.  Kopp replied that                                                                    
the  sponsor  had not  received  a  position statement  from                                                                    
those providers.                                                                                                                
Co-Chair Meyer remarked  that the file did  not contain many                                                                    
position letters,  so it was  assumed that most  people were                                                                    
neutral on the legislation.                                                                                                     
Co-Chair   Meyer  wondered   if  the   Labor  and   Commerce                                                                    
subcommittee's   concerns   had  been   addressed.   Senator                                                                    
Dunleavy replied in the affirmative.                                                                                            
Co-Chair  Meyer wondered  if  there was  a  new fiscal  note                                                                    
forthcoming. Mr.  Kopp replied that  there was a  new fiscal                                                                    
note forthcoming.                                                                                                               
Co-Chair  Meyer stressed  that DOC  had  some concerns,  and                                                                    
would perhaps comment on the fiscal note.                                                                                       
9:35:27 AM                                                                                                                    
LAURA  BROOKS,  HEATH   CARE  ADMINISTRATOR,  DEPARTMENT  OF                                                                    
CORRECTIONS, introduced herself.                                                                                                
ROBERT LAWRENCE,  DOCTOR, CHIEF MEDICAL  OFFICER, DEPARTMENT                                                                    
OF CORRECTIONS, introduced himself.                                                                                             
Ms. Brooks  stated that DOC  had worked with the  sponsor on                                                                    
some of  the language of the  bill. She stated that  DOC was                                                                    
one  of the  first  agencies to  use  telemedicine in  order                                                                    
provide  improved medical  services  to  inmates across  the                                                                    
state.  Psychiatrists  began  using  telemedicine  in  1998.                                                                    
Telemedicine  had  allowed  DOC to  defer  some  significant                                                                    
costs that would have been  incurred, if the facilities were                                                                    
staffed.  Telemedicine was  an  integral part  of the  DOC's                                                                    
operations. The  wording in the  bill related  to controlled                                                                    
substances could impact  DOC in the area  of psychiatry, for                                                                    
the new  inmates that  had mental  health crisis.  The tele-                                                                    
psychiatry allowed  for safe and immediate  intervention for                                                                    
inmates  experiencing a  mental  health  crisis. She  stated                                                                    
that DOC was a 24-hour provider,  so there was a 24-hour on-                                                                    
call   system,  so   a  physician   was  always   available.                                                                    
Prescribing controlled substances was common for those on-                                                                      
call  providers, because  the  vast majority  of the  highly                                                                    
intoxicated arrestees  come in  after hours,  and were  at a                                                                    
high  risk  for  alcohol  withdrawal  that  could  be  life-                                                                    
threatening. She estimated that  approximately 3000 of those                                                                    
controlled  substance prescriptions  were written  annually,                                                                    
just  for  that  segment  of   the  inmate  population.  She                                                                    
remarked  that DOC  did not  have policy  concerns with  the                                                                    
legislation, but  was concerned  with the language  in order                                                                    
to continue to provide the services to inmates.                                                                                 
Dr.   Lawrence stressed that  there were different  types of                                                                    
telemedicine in  the state.  He explained  that one  type of                                                                    
telemedicine  was provider  to  provider communication,  and                                                                    
direct patient to provider communication.  Both of the forms                                                                    
of telemedicine  were approved by  the State  Medical Board.                                                                    
The  legislation  addressed  a third  type  of  telemedicine                                                                    
where  a patient  was  able to  contact  a medical  provider                                                                    
directly, without  the existence  of a  prior doctor/patient                                                                    
relationship.  He stressed  that DOC  wanted to  ensure that                                                                    
there   was   no  negative   impact   on   the  history   of                                                                    
9:40:54 AM                                                                                                                    
Co-Chair  Meyer wondered  if  the  legislation included  the                                                                    
amended  language.  Dr.    Lawrence  replied  that  DOC  was                                                                    
currently working  with the bill  sponsor to  draft language                                                                    
that  accommodates  the  forms  of  telemedicine  that  were                                                                    
currently in practice.                                                                                                          
Co-Chair Meyer  wondered if there  would be a  fiscal impact                                                                    
to DOC  in the forthcoming  fiscal note. Ms. Brooks  did not                                                                    
anticipate any change to the fiscal note.                                                                                       
Senator  Olson  expressed  concern regarding  the  issue  of                                                                    
licensing medical  practitioners. He  wanted to  ensure that                                                                    
the medical  providers were clearly  following the  law. Dr.                                                                    
Lawrence replied that the language  was included in order to                                                                    
ensure that the allowance  was not maliciously used, without                                                                    
the   relationship  already   established.   The  FDA   gave                                                                    
different   levels  of   the   prescription  of   controlled                                                                    
substances,  which   restricted  the   prescription  through                                                                    
telemedicine regardless  of state  law allowance.  The other                                                                    
scheduled medicines were just  as equally problematic in the                                                                    
small  communities,  because  of the  potential  for  abuse.                                                                    
Those  restrictions  must  be   in  place  without  a  prior                                                                    
doctor/patient  relationship, to  ensure  that both  parties                                                                    
understand the use of the medication.                                                                                           
Senator Olson noted  that a person agrees to send  a copy of                                                                    
medical  records   to  their  primary  care   provider,  but                                                                    
stressed that  many rural residents  did not have  a primary                                                                    
care  provider.   He  wondered   if  that  was   taken  into                                                                    
consideration. Dr.   Lawrence replied  that DOC  never faced                                                                    
that issue.  He could not  speak to how other  physicians in                                                                    
the state would respond to that.                                                                                                
Senator Olson  stressed that those  people who did  not have                                                                    
any  health care  coverage or  protection should  not be  at                                                                    
risk  of losing  their  licenses. Dr.   Lawrence  recognized                                                                    
that  there  was  a  fear   of  telemedicine  hampering  the                                                                    
business side of medicine in the state.                                                                                         
Co-Chair  Meyer  stated  that  the  new  language  would  be                                                                    
incorporated into a forthcoming committee substitute.                                                                           
9:48:41 AM                                                                                                                    
DAVE  POWERS, DOCTOR,  BRISTOL BAY  HEALTH, DILLINGHAM  (via                                                                    
teleconference),  addressed  some   concerns  regarding  the                                                                    
legislation. When he  moved to Alaska in 1984,  he worked in                                                                    
Anchorage. At the time, he  was told that each small village                                                                    
had a  medical provider. He  found that  to be true  when he                                                                    
worked  in  each village.  He  felt  that there  was  better                                                                    
medical  care  in  rural  Alaska than  there  was  in  rural                                                                    
Colorado and  Idaho. He  worked to  get telemedicine,  as it                                                                    
currently  stands,  in  1998, which  rapidly  became  relied                                                                    
upon. He felt that virtually  no one was restricted from the                                                                    
telemedicine  use. He  stressed  that  the interaction  with                                                                    
health aides  was essential for telemedicine,  so there were                                                                    
no laws broken with regard  to a patient's history and vital                                                                    
signs. He  remarked that the  legislation made it  seem like                                                                    
the practices  were not already  occurring. He felt  that it                                                                    
made the common practices illegal.                                                                                              
9:55:30 AM                                                                                                                    
Co-Chair Meyer  wondered if the  State Medical Board  was in                                                                    
support  of   the  bill.  Dr.  Powers   responded  that  the                                                                    
legislation was intended  for those in rural  Alaska with no                                                                    
access to  health care.  He stated  that the  current system                                                                    
was in  almost every  village in Alaska,  and there  were no                                                                    
restrictions for the Natives to use that system.                                                                                
Senator  Olson  wondered  if  the  legislation  defined  the                                                                    
boundaries more  clearly. Dr. Powers  replied that  the bill                                                                    
did not clarify telemedicine, and only raised concerns.                                                                         
Senator Olson asked that Dr.  Powers examine the forthcoming                                                                    
committee substitute.                                                                                                           
Co-Chair Meyer felt  that some concerns would  be address in                                                                    
the forth-coming committee substitute.                                                                                          
HENRY    PHILLIPS,   DOCTOR,    TELADOC,   NASHVILLE    (via                                                                    
teleconference),  addressed  some   concerns  regarding  the                                                                    
legislation.  He pointed  out  that the  Medical Board  took                                                                    
action against some  physicians in his program  to pull some                                                                    
licenses.  The board  had announced  that they  were against                                                                    
telehealth, at  least in  certain circumstances.  There were                                                                    
approximately 15  million Americans that were  in telehealth                                                                    
programs,  and  would  probably double  in  the  next  year.                                                                    
Telehealth  helped  to  solve  a  rural  access  issue.  The                                                                    
legislation allowed  for someone to stay  in their location,                                                                    
and contact  a physician  that they do  not have  a previous                                                                    
relationship  with  and  not travel  to  that  location.  He                                                                    
stated  that  50 percent  of  telehealth  occurred in  rural                                                                    
areas and the  other 50 percent occurred  in urban settings.                                                                    
He stated that  it was still difficult  access your provider                                                                    
in a  timely manner. The  legislation allowed for  access to                                                                    
telehealth to all Alaskans.                                                                                                     
10:02:33 AM                                                                                                                   
SHEELA  TALLMAN, PREMERA  BLUE  CROSS  BLUE SHIELD,  SEATTLE                                                                    
(via  teleconference), stated  that  she  was available  for                                                                    
Vice-Chair Fairclough  wondered how  the insurance  would be                                                                    
handled  for   a  person  who   did  not  have   a  physical                                                                    
appointment  with  a  physician. Ms.  Tallman  replied  that                                                                    
telemedicine services were provided,  and she was only aware                                                                    
of it if a provider used a modifier with a claim submitted.                                                                     
Vice-Chair Fairclough  asked if insurance  companies covered                                                                    
telemedicine.  Ms. Tallman  responded  that Premera  covered                                                                    
telemedicine  services, as  long as  the service  is covered                                                                    
under the policy.                                                                                                               
RON  HALE,   HOSPITAL  ADMINISTRATION,   ALASKA  PSYCHIATRIC                                                                    
INSTITUTE,   ANCHORAGE   (via  teleconference),   introduced                                                                    
Co-Chair Meyer CLOSED public testimony.                                                                                         
Senator   Olson  queried   Mr.   Hale's   position  on   the                                                                    
legislation. Mr. Hale  replied that he could  not provide an                                                                    
opinion, because he was a  state employee. He wanted to work                                                                    
with the sponsor to enhance the language of the bill.                                                                           
Senator Olson wondered  if Mr. Hale had the  language of the                                                                    
new committee substitute.  Mr. Hale replied that  he had not                                                                    
seen the new committee substitute.                                                                                              
SB  80  was   HEARD  and  HELD  in   committee  for  further                                                                    
10:07:12 AM                                                                                                                   
AT EASE                                                                                                                         
10:08:53 AM                                                                                                                   
SENATE CONCURRENT RESOLUTION NO. 16                                                                                           
     Requesting the  Governor to  investigate and  report to                                                                    
     the legislature  regarding the  development of  a large                                                                    
     coal  power  plant  and  associated  electric  grid  to                                                                    
     provide energy to residents of the state.                                                                                  
10:09:20 AM                                                                                                                   
Co-Chair Kelly  explained SCR  16. He  felt that  the energy                                                                    
portfolio in  Alaska was not  diversified. He  remarked that                                                                    
Alaska could provide the need for  coal in the world for 100                                                                    
years. 16 requests the  Governor investigate the development                                                                    
of a  large coal  power plant  and associated  electric grid                                                                    
and  to evaluate  the costs  and benefits  of coal-generated                                                                    
energy with  respect to other  energy sources. Today,  it is                                                                    
unfashionable  to  talk  about   our  most  abundant  energy                                                                    
source,  Coal.    Alaska  has enough  coal  to  provide  for                                                                    
peoples' needs for hundreds of  years. It is a plentiful and                                                                    
inexpensive source  of energy.   Coal power plants  are more                                                                    
efficient than ever.  Some  proposed and experimental plants                                                                    
even  remove carbon  dioxide.   Coal  is  far more  abundant                                                                    
globally than  either oil or  natural gas.  Fashions change,                                                                    
but  if we  fail to  have this  conversation today,  we will                                                                    
have failed to keep this  option open for future generations                                                                    
of Alaskans.  This is that day,  and we need to  advance the                                                                    
conversation on coal  today so it remains  in our vernacular                                                                    
for  tomorrow.  Yes, coal  requires  mining,  and there  are                                                                    
individuals and  corporate entities  that attack  any effort                                                                    
to disturb  the earth so  as to  provide for mankind.   They                                                                    
are part  of the  conversation, but  often shout  too loudly                                                                    
about  issues of  possible relevance  outside,  that do  not                                                                    
apply to Alaska's  coal. Coal can be used to  heat homes, it                                                                    
can power communities. Alaska has  40 percent more coal than                                                                    
the Lower 48. Alaskan coal  is ultra-low sulfur fuel without                                                                    
concentrations of  trace elements considered harmful  and is                                                                    
the cleanest not only in  the United States, but perhaps the                                                                    
world.  It  is the  ideal  fuel,  with  the best  chance  of                                                                    
attaining   the  mandates   of  the   1990  Clean   Air  Act                                                                    
amendments. Coal is  not just our past, but is  also part of                                                                    
our future.  We have the  ability to secure  Alaska's energy                                                                    
independence with a resource that  is abundant in our state.                                                                    
SCR  16  will help  keep  coal  in  our consciousness  as  a                                                                    
solution  to our  energy  needs. He  felt  that the  current                                                                    
fiscal  note  did  not  provide   an  accurate  reflect  the                                                                    
legislation's intent.                                                                                                           
10:16:30 AM                                                                                                                   
CARLY WIER, SELF,  ANCHORAGE (via teleconference), testified                                                                    
against SCR 16. She felt  that it was irresponsible to build                                                                    
a  power plant  without  regard to  the  federal permits  or                                                                    
restrictions. She  stressed that  there were  more effective                                                                    
ways to  embark on a dialog  or make a point  to the federal                                                                    
government  than wasting  $75,000 or  more to  determine the                                                                    
cost  of a  legal battle  with the  federal government  on a                                                                    
study  for a  coal plant  that  could not  be built  without                                                                    
meeting federal regulations, and  would not even address the                                                                    
needs of Alaska's small and  diverse rural populations. Coal                                                                    
was the  dirtiest available fuel,  and stressed  that Alaska                                                                    
had  many  other  options.  She stressed  that  it  was  not                                                                    
"fashion" that  forced people to  stop using lead  in dishes                                                                    
or mercury to make hats,  but rather a new understanding and                                                                    
rational decision  making that  changed the way  humans used                                                                    
resources.  She  stressed  that   the  global  markets  were                                                                    
demonstrating the new understanding of the dangers of coal.                                                                     
LORALI    SIMON,    USIBELI    COAL   MINE,    HEALY    (via                                                                    
teleconference), testified  in support  of SCR 16.  She felt                                                                    
that the  legislature must consider the  implications of all                                                                    
the different  energy resources, and she  stressed that coal                                                                    
had provided  reliable and affordable  energy to  Alaska for                                                                    
100 years. She stated that coal  had would continue to be an                                                                    
important aspect of Alaska's energy.                                                                                            
Co-Chair Meyer CLOSED public testimony.                                                                                         
SCR  16  was  HEARD  and   HELD  in  committee  for  further                                                                    
2d CS FOR HOUSE BILL NO. 23(RLS)                                                                                              
     "An   Act  creating   the  Knik   Crossing  Development                                                                    
     Corporation as  a subsidiary corporation of  the Alaska                                                                    
     Housing Finance  Corporation and  relating to  bonds of                                                                    
     the Knik Crossing Development Corporation."                                                                                
10:25:32 AM                                                                                                                   
REPRESENTATIVE  MARK  NEUMAN,  outlined the  basics  of  the                                                                    
legislation.  He explained  that  House Bill  23 amends  the                                                                    
Knik  Arm Bridge  and Toll  Authority's enabling  statute to                                                                    
provide  for  a  successful  procurement for  the  Knik  Arm                                                                    
Crossing  project and  to generate  the best  value for  the                                                                    
state. Passing  this legislation  this session  is important                                                                    
to seeing  the Knik Arm  Crossing efficiently move  toward a                                                                    
successful and  low-cost procurement process  and facilitate                                                                    
being open for  traffic in 2015. The Knik  Arm Crossing will                                                                    
be a  significant addition  to Alaska's  infrastructure that                                                                    
will further facilitate the movement  of goods and people in                                                                    
the state.  This bill was  written in consultation  with the                                                                    
Knik  Arm  Bridge and  Toll  Authority  (KABATA), which  was                                                                    
established  in 2003  by the  Alaska  Legislature. The  bill                                                                    
accomplishes many items KABATA  has deemed necessary to have                                                                    
a successful  public-private partnership  procurement. Those                                                                    
items are:                                                                                                                      
   Increase in KABATA's Bonding Authority from $500 million                                                                     
   to $600 million                                                                                                              
     · The $600 million number represents the same amount                                                                       
        authorized under Private Activity Bond (PABs)                                                                           
        allocation from FHWA                                                                                                    
     · Lowers the cost of capital for the project and                                                                           
        ultimately lowers the cost to end users                                                                                 
     · Private partner is the borrower of any PABs issued.                                                                      
   Clarify that the bridge and associated facilities are                                                                        
   exempt from state and local property taxes                                                                                   
     · Like any other transportation project in our State,                                                                      
        the roads and bridges are not subject to property                                                                       
     ·  Any  private   facilities   developed  outside   the                                                                    
        crossing will be taxable                                                                                                
     ·  Property  tax  exemption  reduces  the  availability                                                                    
        payment and reduces the toll                                                                                            
   Contractual Monetary Obligations                                                                                             
     ·  Identifies the *obligations of the  State of Alaska*                                                                    
        under a P3 process                                                                                                      
     ·  The  legislative   language  applies   to  "monetary                                                                    
        liabilities" which may be incurred by KABATA under a                                                                    
        P3 process                                                                                                              
     ·  Any P3 agreement needs to be  approved by the KABATA                                                                    
        Board of Directors, State AG's office, and ADOT&PF                                                                      
     ·  Serves to  lower  the cost  of  debt  and equity  to                                                                    
        finance the project                                                                                                     
     · Keeps the tolls affordable to the traveling public                                                                       
   Project reserve                                                                                                              
     ·  Creation of a reserve fund is  to provide a backstop                                                                    
        for toll revenue fluctuations.                                                                                          
     ·  Serves to  enhance  the  credit  worthiness  of  the                                                                    
        project and reduce project costs                                                                                        
     · Will be repaid over the project life                                                                                     
Vice-Chair  Neuman   stated  that   A  the   above  language                                                                    
clarifications  and additions  serve  to lower  the cost  of                                                                    
capital  on  this  much needed  infrastructure  project  and                                                                    
deliver the benefits in a timely and efficient manner.                                                                          
10:33:06 AM                                                                                                                   
Co-Chair Kelly  MOVED to ADOPT the  committee substitute for                                                                    
SCS  2d  CS HB  23  (FIN),  work draft  28-LS014\R  (Martin,                                                                    
2/13/14). There being NO OBJECTION, it was so ordered.                                                                          
SUZANNE  ARMSTRONG, STAFF,  SENATOR  KEVIN MEYER,  explained                                                                    
the  changes in  the  CS. She  referred  the explanation  of                                                                    
changes (copy on file):                                                                                                         
     Section  1: Amends  AS 19.75.021  Establishment of  the                                                                    
     Authority (KABATA)                                                                                                         
     Amends  existing  law  to prevent  the  dissolution  of                                                                    
     KABATA until bonds issued by the State are satisfied.                                                                      
     Section  2: Amends  AS 19.75.111  Powers and  Duties of                                                                    
     Authority (KABATA)                                                                                                         
     Amends existing  law to allow  KABATA to enter  into an                                                                    
     agreement  with  the  State  to  pledge  residual  toll                                                                    
    revenues to pay debt service incurred by the State.                                                                         
     Section 3:  Amends AS 19.75.211 Bonds  of the Authority                                                                    
     Amends  existing   law  to   require  the   State  Bond                                                                    
     Committee  to   evaluate  whether  toll   revenues  are                                                                    
     adequate for  payment of the principal  and interest on                                                                    
     bonds  issued  by the  State  before  KABATA may  issue                                                                    
     additional toll revenue bonds.                                                                                             
     Section  4: Amends  AS 19.75.221  Trust Indentures  and                                                                    
     Trust Agreements; Funds and Reserves (KABATA)                                                                              
     Amends existing  law to require  that if  KABATA issues                                                                    
     bonds in addition  to the toll revenue  bonds issued by                                                                    
     the State,  KABATA's trust agreement would  require the                                                                    
     authority to agree to keep  tolls at a level sufficient                                                                    
     to  cover  any  prior  toll  revenue  pledges  made  to                                                                    
    support previously issued State toll revenue bonds.                                                                         
     Section 5: Amends AS 19.75.231 Validity of Pledge                                                                          
     Amends  existing  law   to  express  the  Legislature's                                                                    
     intent that  a toll  revenue pledge  made by  KABATA to                                                                    
     support bonds  issued by the  State is valid  and shall                                                                    
     give rise to a lien against toll revenues.                                                                                 
     Section 6:  Establishes the  Framework for  Issuance of                                                                    
     Toll Revenue Bonds for a Toll Bridge                                                                                       
     AS 37.15.225 - Bond Authorization                                                                                          
     Net  proceeds  of the  sale  of  bonds remaining  after                                                                    
     payment of costs  of issuance and after  deposit to the                                                                    
     Bond  Reserve Fund,  shall be  transferred to  the Knik                                                                    
     Arm Bridge  & Toll Authority.  The net proceeds  may be                                                                    
     held by a  trustee to be disbursed to pay  the costs of                                                                    
     a toll bridge, as set out in a trust agreement.                                                                            
     Accrued interest  paid on the bonds  shall be deposited                                                                    
     into the Bond Redemption Fund.                                                                                             
     Prior  to  the  issuance   of  bonds,  the  State  Bond                                                                    
     Committee will notify the Legislature.                                                                                     
     AS 37.15.230 - Provides for  a Toll Bridge Revenue Bond                                                                    
     The total unpaid principal amount  of revenue bonds may                                                                    
     not exceed $300,000,000.                                                                                                   
    AS 37.15.235 Establishes a Toll Bridge Revenue Fund                                                                         
     Revenue  received by  the State,  by contract  with the                                                                    
     authority, from the ownership or  operation of the toll                                                                    
     bridge  and  facilities,  shall be  deposited  in  this                                                                    
     Contracts or  other agreements  with the  authority may                                                                    
     establish priorities for the  payment of operations and                                                                    
     maintenance  costs   and  for  the  payment   of  other                                                                    
     obligations   (including   debt  obligations   of   the                                                                    
     authority),  prior  to  payments  to  be  made  by  the                                                                    
    authority to the State for deposit into this fund.                                                                          
     Revenue in the fund may be used only for:                                                                                  
          1. Pay or secure payment of the principal of and                                                                      
          interest on bonds;                                                                                                    
          2. Redeem bonds before the fixed maturity date;                                                                       
          3.  Subject to  appropriation by  the Legislature,                                                                    
          for any other purpose  for which federal funds may                                                                    
          be  obligated   by  the  State  under   23  U.S.C.                                                                    
     AS 37.15.240  Establishes the Toll Bridge  Revenue Bond                                                                    
     Redemption Fund                                                                                                            
     A trust  fund for  paying and  securing the  payment of                                                                    
     the  principal and  interest  on  the bonds  authorized                                                                    
     under AS 37.15.225 - 37.15.285  is created. There is no                                                                    
     limitation  on   the  source  of  funds   that  may  be                                                                    
     deposited  into  the  fund, only  that  funds  in  this                                                                    
     account are  to be used  to pay principal  and interest                                                                    
     on bonds issued under AS 37.15.225 - 37.15.285.                                                                            
     AS 37.15.245 Establishes Bond Terms                                                                                        
     Provides  discretion for  the state  bond committee  to                                                                    
     determine  the  manner,  amount, timing,  and  maturity                                                                    
     date for  the issuance  of bonds  under AS  37.15.225 -                                                                    
    37.15.285. Interest rates may be fixed or variable.                                                                         
     Requires the state bond committee  to consider the best                                                                    
     interests of the  State when setting the  terms of bond                                                                    
     issuance  and   requires  the   final  bond   terms  be                                                                    
     expressed through a resolution of the bond committee.                                                                      
     AS 37.15.250 Bond Resolution                                                                                               
     Provides that  the bond  committee shall  authorize the                                                                    
     issuance  of the  bonds by  adopting a  resolution. The                                                                    
     resolution    may    fix    the    principal    amount,                                                                    
     denominations, date, maturities,  manner of sale, place                                                                    
     or  places  of  payment, terms,  form,  conditions  and                                                                    
     covenants of the bonds.                                                                                                    
     AS 37.15.255 Bond Reserve Fund                                                                                             
     The resolution  authorizing the issuance of  bonds, may                                                                    
     provide  for the  establishment  and  maintenance of  a                                                                    
     special  fund -  The Toll  Bridge Revenue  Bond Reserve                                                                    
     The fund will consist of:                                                                                                  
          1.  All  proceeds  of the  bonds  required  to  be                                                                    
          deposited  into  the fund  by  terms  of the  bond                                                                    
          resolution or a trust agreement;                                                                                      
          2. An  amount equal  to the required  debt service                                                                    
          reserve,  as  determined  by the  Commissioner  of                                                                    
          Revenue; and                                                                                                          
          3. Appropriations approved by the Legislature.                                                                        
          Money in  the fund will  be applied solely  to the                                                                    
          payment  of the  interest and  principal on  bonds                                                                    
          authorized  and   issued  under  AS   37.15.225  -                                                                    
     Money in the  reserve fund, excess of  what is required                                                                    
     for the debt  service reserve, may be  withdrawn or may                                                                    
     be transferred to the bond redemption fund.                                                                                
     Bonds  may  not  be  issued under  a  trust  agreement,                                                                    
     indenture, or bond resolution  unless the required debt                                                                    
     service reserve for the bonds is in the reserve fund.                                                                      
     If the funds  in the fund fall below  the required debt                                                                    
     service   reserve  amount,   as   determined  by   bond                                                                    
     committee, the Commissioner of  Revenue will notify the                                                                    
     Governor  and the  Legislature of  the amount  of funds                                                                    
     necessary  to   restore  the   account  to   an  amount                                                                    
     sufficient  to  meet  the required  debt  service.  The                                                                    
     Legislature  then has  the discretion  of appropriating                                                                    
     funds to replenish  the fund to an amount  equal to the                                                                    
     required debt service reserve.                                                                                             
     AS 37.15.260 Enforcement by Bond Owner                                                                                     
     Provides  that  bondholders,  or  their  trustees,  may                                                                    
     enforce their  rights (transfer, set aside,  payment of                                                                    
     money, and  the enforcement  of all  terms, conditions,                                                                    
     and covenants) in superior court.                                                                                          
     AS 37.15.265 Amounts Required for Payments                                                                                 
     Starting with the  year in which bonds  are issued, the                                                                    
     bond  committee will  certify to  the Commissioners  of                                                                    
     Revenue  and Administration,  the amount,  required for                                                                    
     the  next  two  fiscal  years, to  be  paid  from  toll                                                                    
     revenues or other state appropriations to:                                                                                 
          1. The Bond Redemption Fund - to pay the                                                                              
          principal and interest                                                                                                
          2. The Bond Reserve Fund - to maintain the                                                                            
          required debt service reserve                                                                                         
     AS 37.15.270 Refunding                                                                                                     
     Provides  the  bond  committee with  the  authority  to                                                                    
     refund  parts or  all of  the  bonds at  or before  the                                                                    
     maturity   or   redemption   date,  if   refunding   is                                                                    
     advantageous to or  in the best interest  of the State.                                                                    
     All of  the provisions that  relate to the  issuance of                                                                    
     bonds under AS 37.15.225  - 37.15.285 are applicable to                                                                    
     the refunding bonds.                                                                                                       
     AS 37.15.275 Bonds as Legal Investments                                                                                    
     Provides  that   the  bonds  are   legally  enforceable                                                                    
     securities  that can  be  purchased  by individual  and                                                                    
     institutional investors.                                                                                                   
     AS 37.15.285 Definitions                                                                                                   
     Section 7: Effective Date Clause                                                                                           
     Provides for a July 1, 2014 effective date.                                                                                
10:41:52 AM                                                                                                                   
Senator Hoffman  looked at Section  3, and noticed  that the                                                                    
bond committee  was assigned to  evaluate whether  the total                                                                    
revenues  were  adequate  to  pay   for  the  principal  and                                                                    
interest on  the bonds,  and if  not would  issue additional                                                                    
toll revenues. He  then looked at page 2  regarding the bond                                                                    
reserve fund,  and there was  a provision  for appropriation                                                                    
by   the   legislature.    He   wondered   why   legislation                                                                    
appropriation was necessary, if  in fact Section 3 addressed                                                                    
that  issue with  a toll  adjustment. Ms.  Armstrong replied                                                                    
that  there  were   discussions  regarding  maintaining  the                                                                    
authority's  ability to  issue bonds  itself, especially  if                                                                    
the  legislature  decided  that  it  was  the  appropriating                                                                    
direction,  so the  obligations of  the authority  needed to                                                                    
address the operations, maintenance,  and the state's issued                                                                    
debt  that   the  bill  proposed.  She   stressed  that  the                                                                    
legislature should seriously examine that provision.                                                                            
Senator Hoffman felt  that it was the  main concern, because                                                                    
the state  would maintain the  obligation. He felt  that the                                                                    
toll  would adequately  fund the  construction.  He did  not                                                                    
thing  that there  would be  support,  if the  state had  to                                                                    
cover the cost of construction.                                                                                                 
Senator  Olson stressed  that  there  were very  substantial                                                                    
financial  requirements  and  burdens  that  the  state  was                                                                    
currently addressing.  He asked for an  update regarding the                                                                    
Transportation  Infrastructure  Finance and  Innovation  Act                                                                    
(TIFIA)  loans. Co-Chair  Meyer replied  that Ms.  Armstrong                                                                    
was not  capable of answering  that question.  Senator Olson                                                                    
agreed to receive a response at a later date.                                                                                   
Co-Chair Meyer remarked that the  funding of the project had                                                                    
three  components: 1)  one-third  was TIVIA  bonds; 2)  one-                                                                    
third  in revenue  bonds; 3)  and one-third  federal highway                                                                    
receipts.  The funding  would have  very little  anticipated                                                                    
general  fund   money.  Ms.   Armstrong  agreed   with  that                                                                    
2d CSHB 23(RLS) was HEARD  and HELD in committee for further                                                                    
10:47:55 AM                                                                                                                   
The meeting was adjourned at 10:47 a.m.                                                                                         

Document Name Date/Time Subjects
HB23 KABATA-Summary-12 13-1st-SW-Annotated.pdf SFIN 3/18/2014 9:00:00 AM
HB 23
HB23 Kenworthy-CritiqueResponse-from-Dept-Revenue.pdf SFIN 3/18/2014 9:00:00 AM
HB 23
HB23 Socio-economicrevenue-forecasts-still-missing.pdf SFIN 3/18/2014 9:00:00 AM
HB 23
SCR16 GanguliTablesHg.docx SFIN 3/18/2014 9:00:00 AM
SCR 16
SCR16 Sponsor Statement.docx SFIN 3/18/2014 9:00:00 AM
SCR 16
SCR16 The Case for Coal.docx SFIN 3/18/2014 9:00:00 AM
SCR 16
HB23 First Southwest Financing Plan for Knik Arm Bridge Memorandum.pdf SFIN 3/18/2014 9:00:00 AM
HB 23
HB23 June-12-2013-RFP-Intent-to-Award.pdf SFIN 3/18/2014 9:00:00 AM
HB 23
HB23 summary of changes HB 23 LS0141_R.pdf SFIN 3/18/2014 9:00:00 AM
HB 23
HB23 workdraft 28_LS0141 R.pdf SFIN 3/18/2014 9:00:00 AM
HB 23
KABATA HB23 DOT Joint Proposal v 03-01-14 revised 3-7-14.pdf SFIN 3/18/2014 9:00:00 AM
HB 23
SB080CSSS(L&C)-DCCED-CBPL-03-14-14.pdf SFIN 3/18/2014 9:00:00 AM
SB 80
SCR 16 Coal 3-18-14 Testimony Miller.pdf SFIN 3/18/2014 9:00:00 AM
SCR 16