Legislature(2015 - 2016)SENATE FINANCE 532

03/17/2016 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 101 STATE PARKS FEES & SALES OF MERCHANDISE TELECONFERENCED
Heard & Held
-- Public Testimony --
+ SB 170 DNR FEES FOR GEOLOGICAL SERVICES TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
+ SB 124 EXTEND SUNSET ON AK COMMISSION ON AGING TELECONFERENCED
Heard & Held
                 SENATE FINANCE COMMITTEE                                                                                       
                      March 17, 2016                                                                                            
                         9:04 a.m.                                                                                              
                                                                                                                                
9:04:06 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  MacKinnon  called  the  Senate  Finance  Committee                                                                    
meeting to order at 9:04 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Anna MacKinnon, Co-Chair                                                                                                
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Peter Micciche, Vice-Chair                                                                                              
Senator Click Bishop                                                                                                            
Senator Mike Dunleavy                                                                                                           
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Jeff Jessee,  Chief Executive Officer, Alaska  Mental Health                                                                    
Trust  Authority;  Senator   Cathy  Giessel,  Sponsor;  Akis                                                                    
Gialopsos,   Staff,  Senator   Cathy  Giessel;   Ben  Ellis,                                                                    
Director, Alaska  Division of Parks and  Outdoor Recreation,                                                                    
Department of Natural  Resources; Denise Daniello, Executive                                                                    
Director,  Alaska  Commission  on Aging,  Juneau;  Jacquelli                                                                    
Ziegenfus,  Administrative Operations  Manager, Division  of                                                                    
Senior and  Disabilities Services, Department of  Health and                                                                    
Social   Services;  Senator   Bill  Stoltze;   Kris  Curtis,                                                                    
Legislative Auditor, Alaska Division of Legislative Audit.                                                                      
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Steve  Masterman,  Director,   Division  of  Geological  and                                                                    
Geophysical   Surveys,  Department   of  Natural   Resources                                                                    
Fairbanks.                                                                                                                      
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 101    STATE PARKS FEES & SALES OF MERCHANDISE                                                                               
          SB 101 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
SB 124    EXTEND SUNSET ON AK COMMISSION ON AGING                                                                               
                                                                                                                                
          SB 124 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
SB 170    DNR FEES FOR GEOLOGICAL SERVICES                                                                                      
                                                                                                                                
          SB 170 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
9:05:14 AM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon discussed  housekeeping. She  introduced                                                                    
Jeff Jessee,  Chief Executive Officer, Alaska  Mental Health                                                                    
Trust   Authority,  who   offered  a   fiscal  note   update                                                                    
pertaining to SB 74.                                                                                                            
                                                                                                                                
9:05:28 AM                                                                                                                    
                                                                                                                                
JEFF JESSEE,  CHIEF EXECUTIVE OFFICER, ALASKA  MENTAL HEALTH                                                                    
TRUST  AUTHORITY, explained  that the  trustees had  met the                                                                    
previous day.  He stated that  the trustees  approved nearly                                                                    
$10 million, over 3 years,  to assist in the Medicaid reform                                                                    
effort.  He said  that over  $5 million  of the  funds would                                                                    
supplant  General Funds  currently reflected  in the  fiscal                                                                    
notes for SB 74.                                                                                                                
                                                                                                                                
SENATE BILL NO. 170                                                                                                           
                                                                                                                                
     "An   Act  authorizing   the   Department  of   Natural                                                                    
     Resources,  division  of   geological  and  geophysical                                                                    
     surveys,  to collect  fees  for facilities,  equipment,                                                                    
     products,  and  services;  relating to  accounting  for                                                                    
     certain   program  receipts;   and  providing   for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
9:07:26 AM                                                                                                                    
                                                                                                                                
SENATOR CATHY GIESSEL, SPONSOR,  explained that SB 170 would                                                                    
make  the Department  of Natural  Resources (DNR)  a greater                                                                    
revenue generator.  She presented a  core from an  oil field                                                                    
drill.  She explained  that the  Geological Material  Center                                                                    
(GMC) had been  located for several decades  in Eagle River,                                                                    
where materials  had been stored in  conexes (unheated metal                                                                    
containers)  and  had been  exposed  to  cold and  moisture,                                                                    
causing deterioration.  She relayed that DNR  had bought the                                                                    
Sam's  Club   building  in   East  Anchorage   from  Walmart                                                                    
Corporation several  years ago,  and that the  structure had                                                                    
been  reconfigured as  the  Geologic  Materials Center.  She                                                                    
said that  the library  of rocks  contained in  the building                                                                    
could  generate  revenue  because  it  was  of  interest  to                                                                    
exploders. She  referred to the  document, "FAQs  related to                                                                    
Senate  Bill 170"(copy  on file).  The document  contained a                                                                    
statement from Repsol,  and the role of the  center in their                                                                    
recent  discovery  on  the  Colville   Delta;  the  GMC  had                                                                    
facilitated in  the discovery and  exploration of  the area,                                                                    
possibly  the largest  oil  field  discovered since  Prudhoe                                                                    
Bay.  She  related  that  DNR currently  did  not  have  the                                                                    
authority to charge for use  of their facility, the bill was                                                                    
intended to establish that authority.                                                                                           
                                                                                                                                
9:10:39 AM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon looked at Page  1, lines 11 and 13, which                                                                    
spoke  to  the  printing  and publication  of  reports.  She                                                                    
wondered whether  the figure was antiquated,  or had digital                                                                    
imaging been  explored as an  alternative to  publishing and                                                                    
printing hard copies.                                                                                                           
                                                                                                                                
Senator  Giessel  replied that  all  of  the materials  were                                                                    
available  to view  online, but  that most  people liked  to                                                                    
work from actual paper copy maps.                                                                                               
                                                                                                                                
9:11:36 AM                                                                                                                    
                                                                                                                                
AKIS GIALOPSOS, STAFF, SENATOR  CATHY GIESSEL, discussed the                                                                    
Sectional Analysis (copy on file):                                                                                              
                                                                                                                                
     *Section  1.  Provides  that   fees  collected  by  the                                                                    
     Department of  Natural Resources (department)  under AS                                                                    
     41.08.045, added  by bill section 3,  will be accounted                                                                    
     for separately and that  appropriations from these fees                                                                    
     are not made from the unrestricted general fund.                                                                           
                                                                                                                                
     *Section 2.  Conforms AS 41.08.030 to  the changes made                                                                    
     to AS 41.08 by section 3 of the bill.                                                                                      
     *Section 3. Adds  a new section to  AS 41.08 permitting                                                                    
     the   department's    division   of    geological   and                                                                    
     geophysical  surveys to  charge  and  collect fees  for                                                                    
     facilities, equipment,  products, or services  that the                                                                    
     division offers. Institutes a fee waiver for students                                                                      
     using the facilities, equipment, products or services                                                                      
     for educational purposes.                                                                                                  
                                                                                                                                
     *Section 4. Amend uncodified law to permit the                                                                             
     department to adopt regulations necessary to implement                                                                     
     changes made by the Act.                                                                                                   
                                                                                                                                
    *Section 5. Makes section 4 effective immediately.                                                                          
                                                                                                                                
     *Section 6. Gives sections 1-3 an effective date of                                                                        
     July 1, 2016.                                                                                                              
                                                                                                                                
9:14:07 AM                                                                                                                    
                                                                                                                                
Senator Bishop  wondered how the department  would arrive at                                                                    
a fee schedule.                                                                                                                 
                                                                                                                                
9:14:31 AM                                                                                                                    
                                                                                                                                
STEVE  MASTERMAN,  DIRECTOR,   DIVISION  OF  GEOLOGICAL  AND                                                                    
GEOPHYSICAL   SURVEYS,  DEPARTMENT   OF  NATURAL   RESOURCES                                                                    
FAIRBANKS   (via  teleconference),   stated  that   the  fee                                                                    
schedule  was currently  under evaluation  and  would be  an                                                                    
amalgam  of fees  charges in  other states.  He stated  that                                                                    
they  did not  want to  discourage use  by setting  fees too                                                                    
high.                                                                                                                           
                                                                                                                                
9:15:56 AM                                                                                                                    
                                                                                                                                
Senator Giessel looked at Page  4 of the aforementioned fact                                                                    
sheet,  which  reflected  a   bar  graph  illustrating  core                                                                    
repository service fees in other states.                                                                                        
                                                                                                                                
9:16:22 AM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  wondered why  the word "shall"  had been                                                                    
used instead of "may" on Page 2, line 25 of the bill.                                                                           
                                                                                                                                
Mr. Gialopsos  responded that the  division had  intended to                                                                    
promulgate  regulations to  do the  waiver for  students. He                                                                    
furthered  that the  statutory  regulation  was intended  to                                                                    
ensure  that students  using the  facilities would  still be                                                                    
able to do so, without  the danger of regulations rescinding                                                                    
themselves.                                                                                                                     
                                                                                                                                
9:17:26 AM                                                                                                                    
Vice-Chair  Micciche commented  that  industry would  offset                                                                    
the cost of running the  facility, and that the language was                                                                    
in  no  way meant  to  discourage  students from  using  the                                                                    
facility.                                                                                                                       
                                                                                                                                
9:17:52 AM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  wondered what  would keep  industry from                                                                    
using students  or interns  in order  to bypass  paying fees                                                                    
for facility use.                                                                                                               
                                                                                                                                
Senator Giessel looked at page  2 of the facts document, and                                                                    
pointed out that public school  groups constituted only 5 to                                                                    
10 percent of the annual  visitors to the facility. She said                                                                    
that  the intention  had that  elementary, junior  high, and                                                                    
high school  classes that might be  interested in geological                                                                    
careers would  be able to  visit the facility at  no charge.                                                                    
She spoke  to Co-Chair  MacKinnon's concern  that "students"                                                                    
was a  broad term,  but she believed  that the  division was                                                                    
clear on  the intent  of the sponsor.  She trusted  that the                                                                    
level of  student that  would be allowed  to enter  for free                                                                    
would be clearly defined in regulation.                                                                                         
                                                                                                                                
Co-Chair  MacKinnon understood  that Senator  Giessel viewed                                                                    
university  students  and  academics  differently  than  the                                                                    
student intended under the waiver.                                                                                              
                                                                                                                                
Senator Giessel replied that that  had been the intention of                                                                    
the Senate Resources Committee.                                                                                                 
                                                                                                                                
9:19:43 AM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  though that  the language could  be more                                                                    
specific.                                                                                                                       
                                                                                                                                
9:20:08 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Micciche  felt  that  an  intern  working  under                                                                    
contract  with  an  industry party  would  have  their  fees                                                                    
covered  by the  industry  employer. He  specified that  his                                                                    
intent had  been that  the facility  would be  available for                                                                    
free  to individual  students who  were interested  in doing                                                                    
research in the facility.                                                                                                       
                                                                                                                                
9:20:51 AM                                                                                                                    
                                                                                                                                
Senator  Olson queried  that amount  of anticipated  revenue                                                                    
from the facility.                                                                                                              
                                                                                                                                
Senator Giessel deferred to Mr. Masterman.                                                                                      
                                                                                                                                
9:21:15 AM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon  directed  committee  attention  to  the                                                                    
fiscal note,  which reflected that  revenue was  expected to                                                                    
increase as usage grew; up to $485 thousand by FY 22.                                                                           
                                                                                                                                
9:21:54 AM                                                                                                                    
                                                                                                                                
Mr.  Masterman interjected  that the  fiscal note  contained                                                                    
estimates that were  based on the past history  of usage and                                                                    
new services  that the  facility planned  to offer.  He said                                                                    
that  the picture  would become  clearer after  the facility                                                                    
began charging revenue.                                                                                                         
                                                                                                                                
9:22:44 AM                                                                                                                    
                                                                                                                                
Senator Bishop offered support for the legislation.                                                                             
                                                                                                                                
9:23:28 AM                                                                                                                    
                                                                                                                                
Vice-Chair   Micciche  wondered   whether  the   members  of                                                                    
industry  could  obtain  electronic seismic  data  from  the                                                                    
facility.                                                                                                                       
                                                                                                                                
Mr. Masterman replied  in the affirmative. He  said that the                                                                    
intent was  to work  with the division  to make  the seismic                                                                    
surveys available through the GMC.                                                                                              
                                                                                                                                
9:24:12 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Micciche  asked whether  it  would  be the  most                                                                    
valuable data at the center.                                                                                                    
                                                                                                                                
Mr. Masterman replied  that it was a  possibility, and there                                                                    
was a  hope that such  valuable information would  provide a                                                                    
significant revenue stream for the facility.                                                                                    
                                                                                                                                
9:24:59 AM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon  wondered   why  there  the  anticipated                                                                    
revenue  did  not result  in  a  corresponding drop  in  the                                                                    
General Funds reflected in the fiscal note.                                                                                     
Mr. Masterman responded  that at this point  the revenue was                                                                    
intended  to bring  the building  into  the public  building                                                                    
fund,  which had  an  entry level  threshold.  He said  that                                                                    
until the  GMC revenue  reached the  threshold to  enter the                                                                    
fund, the revenue generate would  enter the General Fund. He                                                                    
believed that the fiscal note offered further explanation.                                                                      
                                                                                                                                
Co-Chair MacKinnon OPENED public testimony.                                                                                     
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
9:27:32 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:29:48 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SB  170  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
SENATE BILL NO. 101                                                                                                           
                                                                                                                                
     "An Act relating to fees for use of state park system                                                                      
     facilities; and relating to the sale of merchandise by                                                                     
     the Department of Natural Resources."                                                                                      
                                                                                                                                
9:30:23 AM                                                                                                                    
                                                                                                                                
BEN ELLIS,  DIRECTOR, ALASKA DIVISION  OF PARKS  AND OUTDOOR                                                                    
RECREATION, DEPARTMENT OF  NATURAL RESOURCES, explained that                                                                    
the bill would remove  language that required all authorized                                                                    
fees to be  collected in a park unit, making  clear that the                                                                    
Department  of  Natural  Resources   (DNR)  would  have  the                                                                    
authority to collect fees online  or in locations outside of                                                                    
a park unit.                                                                                                                    
                                                                                                                                
9:31:29 AM                                                                                                                    
                                                                                                                                
Senator Dunleavy  understood that  there were drop  box fees                                                                    
at state parks.                                                                                                                 
                                                                                                                                
Mr. Ellis replied  that there were drop boxes  for user fees                                                                    
at developed facilities, and that passes were available.                                                                        
                                                                                                                                
9:32:23 AM                                                                                                                    
                                                                                                                                
Senator Olson  queried the  reasoning behind  the clarifying                                                                    
language related to  fees being collected outside  of a park                                                                    
unit.                                                                                                                           
                                                                                                                                
Mr. Ellis stated that the  original intent of the governor's                                                                    
bill had been  to allow state parks to  sell merchandise for                                                                    
a  profit,  in  order  to decrease  the  dependence  on  the                                                                    
General Fund.  He said that the  bill had been modeled  on a                                                                    
survey that was conducted over  20 states, with the original                                                                    
concept  to  provide  an  opportunity   for  state  to  sell                                                                    
merchandise for  profit. He said  that current  statute only                                                                    
allowed for the sale of items for cost.                                                                                         
                                                                                                                                
9:35:07 AM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon  directed  committee  attention  to  the                                                                    
original draft  of the legislation. She  queried the removal                                                                    
of Section 2 from the original bill.                                                                                            
                                                                                                                                
Mr. Ellis  responded that the  language had been  removed by                                                                    
the  Senate Resources  Committee. He  said that  concern had                                                                    
been expressed during  the bill hearing that  the bill could                                                                    
be in competition with the private sector.                                                                                      
                                                                                                                                
9:35:57 AM                                                                                                                    
                                                                                                                                
Senator Bishop  wondered whether the bill  would benefit the                                                                    
division.                                                                                                                       
                                                                                                                                
Mr. Ellis  responded that  the current  version of  the bill                                                                    
would  alleviate  a  technical   issue  that  some  had  not                                                                    
believed was a serious issue.                                                                                                   
                                                                                                                                
9:37:04 AM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  stressed that the  bill was an  issue of                                                                    
public  policy.  She  said  that  the  government  generally                                                                    
avoided competition  with the private sector.  She said that                                                                    
her office would take amendments  until Wednesday, March 23,                                                                    
2016.                                                                                                                           
                                                                                                                                
9:37:42 AM                                                                                                                    
                                                                                                                                
Senator Olson  wondered whether there were  private entities                                                                    
that sold comparable items to those sold by the division.                                                                       
                                                                                                                                
Mr.  Ellis responded  that the  division  was not  currently                                                                    
selling any products. He added  that he did not believe that                                                                    
any company  was selling Alaska  State Park  merchandise. He                                                                    
stated that there  was an internet based  company in Seattle                                                                    
that was  could create  merchandise using  any names  in the                                                                    
public domain.                                                                                                                  
                                                                                                                                
9:38:56 AM                                                                                                                    
                                                                                                                                
Vice-Chair Micciche  remarked that  the bill was  similar to                                                                    
SB 101,  as it  was an  attempt for  a department  to offset                                                                    
costs. He appreciated the proposed bill.                                                                                        
                                                                                                                                
9:39:42 AM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon   shared  that  she  had   served  as  a                                                                    
department  manager at  JC Penney,  which  sold millions  in                                                                    
Alaskan merchandise. She felt that  it would be nice for the                                                                    
state  to get  credit for  distributing state  products. She                                                                    
suggested that the  state could be a  wholesaler of original                                                                    
Alaska brand merchandise.                                                                                                       
                                                                                                                                
Mr.  Ellis  concurred.  He stressed  that  the  state  would                                                                    
create the  merchandise, and would  sell it to  a wholesaler                                                                    
or retailer at a marked up cost.                                                                                                
                                                                                                                                
Co-Chair MacKinnon  reiterated that amendments were  due the                                                                    
following Wednesday.                                                                                                            
                                                                                                                                
9:42:12 AM                                                                                                                    
                                                                                                                                
Senator Dunleavy spoke in support of the legislation.                                                                           
                                                                                                                                
Mr. Ellis quoted a parks director in New Hampshire:                                                                             
                                                                                                                                
     "We're fairly passionate about  our retail operation in                                                                    
     the  Hampshire   State  Parks.  When  you   change  the                                                                    
     dialogue   from  cost   control,   to  revenue   growth                                                                    
     opportunities,  all  of  the  sudden  new  doors  open,                                                                    
     employees  attitudes  shift,  and we  build  a  broader                                                                    
     customer  base of  support, loyalty,  and advocacy  for                                                                    
     the states park system."                                                                                                   
                                                                                                                                
9:43:43 AM                                                                                                                    
                                                                                                                                
Senator Bishop agreed  that the bill was a  good concept. He                                                                    
stressed that Alaska was a tourism destination.                                                                                 
9:44:37 AM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon hoped that  the merchandise would be made                                                                    
in America, possibly in partnership with the prison system.                                                                     
                                                                                                                                
9:45:07 AM                                                                                                                    
                                                                                                                                
Senator Olson spoke to Section  2 of the original version of                                                                    
the  legislation. He  understood  that this  portion of  the                                                                    
bill had been removed from  the current version. He wondered                                                                    
whether the  change had altered  the original intent  of the                                                                    
legislation.                                                                                                                    
                                                                                                                                
Mr. Ellis responded  that the current bill  version from the                                                                    
Senate  Resources Committee  did  not  achieve the  original                                                                    
intent of the bill.                                                                                                             
                                                                                                                                
9:45:58 AM                                                                                                                    
                                                                                                                                
Senator  Olson wondered  why the  committee was  hearing the                                                                    
legislation.                                                                                                                    
                                                                                                                                
Mr. Ellis  responded that in  April 2015, the bill  had been                                                                    
amended to  eliminate the part  that related to the  sale of                                                                    
merchandise, and  move forward the section  that offered the                                                                    
technical amendment pertaining to online payments.                                                                              
                                                                                                                                
9:46:56 AM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon  clarified  that   Section  2  had  been                                                                    
removed from the  original bill, but could be  offered as an                                                                    
amendment.                                                                                                                      
                                                                                                                                
9:48:07 AM                                                                                                                    
                                                                                                                                
Senator Olson  wondered whether the department  was in favor                                                                    
of the current version of the legislation.                                                                                      
                                                                                                                                
Mr. Ellis  responded that the  department was  supportive of                                                                    
clarifying the revenue stream. He  repeated that the current                                                                    
version  of  the  bill  did  not  speak  to  the  governor's                                                                    
original intent.                                                                                                                
                                                                                                                                
9:48:52 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:49:02 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:49:05 AM                                                                                                                    
                                                                                                                                
Vice-Chair Micciche revealed that  there had been concern in                                                                    
the Senate Resources Committee  about state competition with                                                                    
the  private  sector,  as  well as  the  cost  of  employing                                                                    
additional state employees. He hoped  that the bill could be                                                                    
amended to  require that Alaskan  businesses be used  in the                                                                    
production of merchandise.                                                                                                      
                                                                                                                                
9:50:25 AM                                                                                                                    
                                                                                                                                
Mr. Ellis  remarked that the  division was sensitive  to the                                                                    
competition with  the private sector, and  shared that there                                                                    
was a constant search for balance.                                                                                              
                                                                                                                                
Co-Chair MacKinnon OPENED public testimony.                                                                                     
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
SB  101  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
SENATE BILL NO. 124                                                                                                           
                                                                                                                                
     "An Act extending the termination date of the Alaska                                                                       
     Commission on Aging; and providing for an effective                                                                        
     date."                                                                                                                     
                                                                                                                                
9:52:43 AM                                                                                                                    
                                                                                                                                
DENISE  DANIELLO, EXECUTIVE  DIRECTOR, ALASKA  COMMISSION ON                                                                    
AGING,  JUNEAU, explained  that the  sources of  funding for                                                                    
the commission  included General Funds, General  Fund mental                                                                    
health funds  and an interagency  receipt from  the Division                                                                    
of Senior and Disability Services,  as well as Mental Health                                                                    
Trust authority authorized receipts for one position.                                                                           
                                                                                                                                
9:53:51 AM                                                                                                                    
                                                                                                                                
JACQUELLI ZIEGENFUS,     ADMINISTRATIVE OPERATIONS MANAGER,                                                                     
DIVISION OF SENIOR AND  DISABILITIES SERVICES, DEPARTMENT OF                                                                    
HEALTH  AND SOCIAL  SERVICES,  (DHSS)  explained the  fiscal                                                                    
note  in   detail.  She  noted  that   the  total  operating                                                                    
expenditures each  year was $539.7 thousand;  $42.9 from the                                                                    
General  Fund, $348.1  from interagency  receipts (this  was                                                                    
funding that was  passed on from the Division  of Senior and                                                                    
Disability  Services  to   the  commission),  $29.6  General                                                                    
Fund/Mental  Health, and  $119.1  from  Mental Health  Trust                                                                    
Authority dollars.                                                                                                              
                                                                                                                                
9:55:12 AM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  wondered why  there were  four personnel                                                                    
staff to support 11 board members.                                                                                              
                                                                                                                                
Ms.  Daniello replied  that  the 11  person  board had  been                                                                    
supported by four staffers for  many years. She said that in                                                                    
2004,  the  commission  had been  under  the  Department  of                                                                    
Administration, and at that time  the decision had been made                                                                    
to transfer the commission over  to the Department of Health                                                                    
and Social Services with a  focus on advocacy, planning, and                                                                    
education  for   senior  programs.   She  shared   that  the                                                                    
commission provided  a significant amount of  service in the                                                                    
state by developing a state  plan for senior services, which                                                                    
required  substantial  staff  support  in  developing  needs                                                                    
assessment  activities, and  by conducting  community forums                                                                    
and  advising the  governor and  the  legislature on  senior                                                                    
programs.  She  detailed  the  important  work  for  seniors                                                                    
performed by the board and their staff.                                                                                         
                                                                                                                                
9:56:57 AM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon  specifically  wondered  how  often  the                                                                    
plans needed  to be rewritten.  She questioned the  need for                                                                    
four staff  positions to serve  the board. She  reminded Ms.                                                                    
Daniello  that  all other  state  agencies  had taken  a  22                                                                    
percent, year-to-year, Operating  Budget reduction. She said                                                                    
that  at  least  one  staff  member  should  be  immediately                                                                    
removed  from  the fiscal  note,  if  not two,  because  the                                                                    
interagency  receipts  were  actually General  Fund  dollars                                                                    
that came from other departments.                                                                                               
                                                                                                                                
Ms. Daniello explained that the  four staff were involved in                                                                    
the development  and implementation  of the  state planning.                                                                    
She  shared that  there were  six goals  in the  state plan,                                                                    
with 24  strategies and 28 performance  measures. She shared                                                                    
that the efforts  were based on the  development of services                                                                    
to promote  the health and  safety of Alaska's  seniors. She                                                                    
announced  that she  was shocked  by the  potential loss  of                                                                    
personnel. She  said that the  commission worked  to educate                                                                    
Alaskans  about senior  issues  through  many campaigns  and                                                                    
coalitions.  She added  that employees  talked with  seniors                                                                    
about Medicaid  reform efforts and hosted  community forums.                                                                    
She  shared  that the  commission  hosted  a regular  senior                                                                    
legislative advocacy  teleconference, which helped  to guide                                                                    
policy and budget recommendations.                                                                                              
                                                                                                                                
9:59:53 AM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  wondered what was  specifically required                                                                    
of the  commission under  state statute  in order  to comply                                                                    
with the federal Older Americans Act.                                                                                           
                                                                                                                                
Ms. Daniello  responded that the commission  was responsible                                                                    
for the  development of the  aforementioned state  plan, for                                                                    
the education of  Alaskans about senior issues, and  to be a                                                                    
visible advocate for seniors.                                                                                                   
                                                                                                                                
10:00:24 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:01:42 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
10:01:45 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon  summarized AS 47.45.240, which  spoke to                                                                    
the power, duties, and limitations of the commission:                                                                           
                                                                                                                                
     (1)  approve   a  comprehensive  statewide   plan  that                                                                    
     identifies  the concerns  and needs  of older  Alaskans                                                                    
     and, with  reference to the approved  plan, prepare and                                                                    
     submit  to  the  governor  and  legislature  an  annual                                                                    
     analysis  and  evaluation  of  the  services  that  are                                                                    
     provided to older Alaskans;                                                                                                
     (2) make  recommendations directly to the  governor and                                                                    
     the   legislature   with    respect   to   legislation,                                                                    
     regulations,   and  appropriations   for  programs   or                                                                    
     services that benefit older Alaskans;                                                                                      
                                                                                                                                
Co-Chair  MacKinnon   asked  how  often   the  comprehensive                                                                    
statewide plan was reviewed.                                                                                                    
                                                                                                                                
Ms. Daniello responded that the plan was reviewed annually.                                                                     
                                                                                                                                
10:02:38 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon asked  whether at the time  of review the                                                                    
plan was readopted, or was there was five-year plan.                                                                            
                                                                                                                                
Ms. Daniello  replied that  the plan  was a  four-year plan.                                                                    
She furthered  that the commission gathered  data related to                                                                    
performance measures  associated with recognized  goals. She                                                                    
added that  the commission brought together  stakeholders to                                                                    
discuss any work that had been completed on the plan.                                                                           
                                                                                                                                
10:03:02 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon read from the statute:                                                                                       
                                                                                                                                
     (3) encourage the  development of municipal commissions                                                                    
     serving older Alaskans  and community-oriented programs                                                                    
     and services for the benefit of older Alaskans;                                                                            
     (4)  employ an  executive  director who  serves at  the                                                                    
     pleasure of the commission;                                                                                                
     (5)  help older  Alaskans lead  dignified, independent,                                                                    
     and useful lives;                                                                                                          
     (6) request  and receive reports and  audits from state                                                                    
     agencies  and  local  institutions concerned  with  the                                                                    
     conditions and needs of older Alaskans;                                                                                    
                                                                                                                                
Co-Chair  MacKinnon asked  what type  of reports  and audits                                                                    
the commission received from state agencies.                                                                                    
                                                                                                                                
Ms.  Daniello responded  that the  commission published  the                                                                    
annual  Senior Snapshot,  which was  contained in  an annual                                                                    
report that the commission  provided to the legislature. She                                                                    
said that for  the document, data was  gathered from variety                                                                    
of  demographic and  economic  health  indicators. She  said                                                                    
that other reports dealing with  health and safety were also                                                                    
prepared by the commission.                                                                                                     
                                                                                                                                
10:03:40 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon read from statute:                                                                                           
                                                                                                                                
     (7)  with the  approval of  the commissioner  of health                                                                    
     and social services, set  policy for the administration                                                                    
     of  federal  programs  subject   to  state  control  as                                                                    
     provided  under   42  U.S.C.   3001  -   3058ee  (Older                                                                    
     Americans Act), as amended;                                                                                                
     (8)  with the  approval of  the commissioner  of health                                                                    
     and social services, set  policy for the administration                                                                    
     of state programs as provided under AS 47.65 ;                                                                             
     (9) give assistance, on request,  to the senior housing                                                                    
     office  in the  Alaska Housing  Finance Corporation  in                                                                    
     administration  of  the  senior  housing  loan  program                                                                    
     under AS  18.56.710 - 18.56.799 and  in the performance                                                                    
     of the office's other duties under AS 18.56.700 ; and                                                                      
     (10)  provide   to  the  Alaska  Mental   Health  Trust                                                                    
     Authority,   for   its    review   and   consideration,                                                                    
     recommendations      concerning     the      integrated                                                                    
     comprehensive  mental health  program  for persons  who                                                                    
     are described  in (d)  of this section  and the  use of                                                                    
     the money in the  mental health trust settlement income                                                                    
     account  in   a  manner  consistent   with  regulations                                                                    
     adopted under AS 47.30.031 .                                                                                               
                                                                                                                                
10:04:35 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon queried the personnel position titles.                                                                       
                                                                                                                                
Ms.  Daniello  responded  that  there was  a  planner  2,  a                                                                    
planner 1, and an administrative assistant.                                                                                     
                                                                                                                                
10:04:54 AM                                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon queried  the responsibilities  of the  2                                                                    
planner positions.                                                                                                              
                                                                                                                                
Ms.  Daniello  explained  that  the  planner  1  focused  on                                                                    
planning  advocacy for  serving senior  mental health  trust                                                                    
beneficiaries. She  stated that  the planner 2  position was                                                                    
in  charge of  the  other responsibilities  under the  state                                                                    
statute.  She  said  that  the  planner  2  position  worked                                                                    
directly with  her to  develop the  state plan  and provided                                                                    
additional planning and advocacy support.                                                                                       
                                                                                                                                
10:06:21 AM                                                                                                                   
                                                                                                                                
Senator Bishop  wondered whether a reduction  in staff would                                                                    
jeopardize the federal  reporting requirement and jeopardize                                                                    
grant funding.                                                                                                                  
                                                                                                                                
Ms.   Daniello  replied   that  it   would  compromise   the                                                                    
commission's  ability to  compile necessary  information and                                                                    
the overall  quality of  the state  plan. She  stressed that                                                                    
the state plan was a  comprehensive document and was used by                                                                    
other   state   and   local  agencies   that   applied   for                                                                    
foundational and corporate grants.                                                                                              
                                                                                                                                
10:07:53 AM                                                                                                                   
                                                                                                                                
Co-Chair   MacKinnon  wondered   whether   there  were   any                                                                    
reductions that could be found in the commission's budget.                                                                      
                                                                                                                                
Ms.  Daniello  replied that  there  had  been reductions  in                                                                    
travel expenses.  She added that  the commission  had worked                                                                    
to contain travel expenses.                                                                                                     
                                                                                                                                
10:08:39 AM                                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon  requested  the  travel  savings  dollar                                                                    
amount.                                                                                                                         
                                                                                                                                
Ms. Daniello replied $3,000 in FY 17.                                                                                           
                                                                                                                                
10:08:58 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon  asked whether  cuts had been  made prior                                                                    
to FY 17.                                                                                                                       
                                                                                                                                
Ms. Daniello replied in the negative.                                                                                           
                                                                                                                                
10:09:05 AM                                                                                                                   
                                                                                                                                
Senator  Olson  asked  whether  the  legislative  audit  had                                                                    
recommended a decrease in staff.                                                                                                
                                                                                                                                
Ms.  Daniello responded  that  the audit  had  made no  such                                                                    
recommendation.                                                                                                                 
                                                                                                                                
10:09:30 AM                                                                                                                   
                                                                                                                                
Senator Olson queried whether  auditors had question whether                                                                    
the work could be done with less staff.                                                                                         
                                                                                                                                
Ms. Daniello replied in the negative.                                                                                           
                                                                                                                                
10:09:43 AM                                                                                                                   
                                                                                                                                
Senator   Bishop  requested   any  corrective   actions  the                                                                    
commission had taken to solve audit findings 1 and 2.                                                                           
                                                                                                                                
Ms. Daniello  responded that the commission  had amended its                                                                    
policies  and   procedures  to  include   corrective  action                                                                    
strategies to  post all meeting  notices for both  the board                                                                    
and  the  committee.  She  said   that  the  commission  now                                                                    
required the  chair of  the commission, as  well as  for the                                                                    
legislative  advocacy committee,  to sign  off on  the watch                                                                    
list prior to its distribution.                                                                                                 
                                                                                                                                
10:10:31 AM                                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon  interjected  that for  the  past  three                                                                    
years the commission had been  asked to take a $3,000 budget                                                                    
cut.                                                                                                                            
                                                                                                                                
Ms. Ziegenfus explained  that, in FY 17,  the commission put                                                                    
forward a $3,000 travel reduction.                                                                                              
                                                                                                                                
10:11:16 AM                                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon   asked  whether  there  had   been  any                                                                    
reductions in the past three years.                                                                                             
                                                                                                                                
Ms. Ziegenfus replied in the negative.                                                                                          
                                                                                                                                
10:11:34 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:12:05 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
10:12:19 AM                                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon reiterated  the  concerns  for the  four                                                                    
staff for 11 board members.                                                                                                     
                                                                                                                                
10:12:54 AM                                                                                                                   
                                                                                                                                
SENATOR  BILL  STOLTZE,   understood  the  fiscal  reasoning                                                                    
behind the committee's examination of the personnel.                                                                            
                                                                                                                                
10:14:37 AM                                                                                                                   
                                                                                                                                
Co-Chair   MacKinnon   invited  Kris   Curtis,   Legislative                                                                    
Auditor, Alaska  Division of Legislative  Audit to  speak to                                                                    
the issue.                                                                                                                      
                                                                                                                                
KRIS  CURTIS,   LEGISLATIVE  AUDITOR,  ALASKA   DIVISION  OF                                                                    
LEGISLATIVE AUDIT, introduced herself.                                                                                          
                                                                                                                                
10:15:14 AM                                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon stressed  that all  of the  councils and                                                                    
commissions  in the  state  were experiencing  repercussions                                                                    
from the fiscal crisis.                                                                                                         
                                                                                                                                
Ms.  Curtis replied  that  Page 10  of  the audit  contained                                                                    
historical  expenditure  information,   including  how  much                                                                    
General  Funds and  federal funds  the commission  received.                                                                    
She said that the division  did not approach audits with the                                                                    
idea of recommending cuts to  positions; however, there were                                                                    
hundreds of  boards and commissions  in the state  that were                                                                    
not currently  up for a  sunset review, and that  perhaps it                                                                    
was time  for a full  review of boards and  commissions. She                                                                    
felt that  an evenhanded review  of the staffing  levels and                                                                    
needs  of commissions  was  a wise  idea  given the  current                                                                    
fiscal climate.  She testified that  the elimination  of one                                                                    
position from the  commission would not result in  a loss of                                                                    
federal funds.  She stressed  that a  cut to  the commission                                                                    
would be  a cut to  the services provided to  the population                                                                    
that they served.                                                                                                               
                                                                                                                                
10:18:03 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon  surmised that the co-chairs  should send                                                                    
a letter requesting  a review for how staff  was utilized to                                                                    
support  boards  and  commissions   across  the  state.  She                                                                    
wondered  when such  an assessment  could be  ready for  the                                                                    
legislature.                                                                                                                    
                                                                                                                                
Ms. Curtis responded that the  Division of Legislative Audit                                                                    
had also faced  budget cuts, and she did not  think that the                                                                    
work  could be  completed by  next legislative  session. She                                                                    
added  that the  new  IRIS system  would present  additional                                                                    
challenges to  the division.  She added  that the  last full                                                                    
review of boards and commission had been conducted in 1992.                                                                     
                                                                                                                                
10:19:33 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon  said that the discussion  would continue                                                                    
into the interim.                                                                                                               
                                                                                                                                
10:20:24 AM                                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon wondered  whether the  committee was  in                                                                    
support   of  reducing   the  personnel   by   one  or   two                                                                    
individuals.  She asserted  that she  was not  targeting the                                                                    
commission, but had to find cuts somewhere.                                                                                     
                                                                                                                                
10:21:00 AM                                                                                                                   
                                                                                                                                
Co-Chair  Kelly wondered  whether the  fiscal note  could be                                                                    
adjusted  in conference  committee  once it  was altered  in                                                                    
finance committee.                                                                                                              
                                                                                                                                
10:21:26 AM                                                                                                                   
                                                                                                                                
Co-Chair   MacKinnon   replied   that  she   would   contact                                                                    
Legislative Legal about the inquiry.                                                                                            
                                                                                                                                
10:21:56 AM                                                                                                                   
                                                                                                                                
Vice-Chair Micciche  wondered why  the budget  had increased                                                                    
$100 thousand since FY 12.                                                                                                      
                                                                                                                                
Ms. Daniello replied  that most of the  increase was through                                                                    
the  personnel service  line. She  shared  that 3  of the  4                                                                    
staff had served on the  commission for 10 years. She stated                                                                    
that the planner  2 was a recent hire. She  noted the steady                                                                    
reduction in travel expenses and  services. She attempted to                                                                    
offer ideas for cost savings.                                                                                                   
                                                                                                                                
Co-Chair MacKinnon said no.                                                                                                     
                                                                                                                                
10:23:42 AM                                                                                                                   
                                                                                                                                
Vice-Chair Micciche probed the increase  from FY 12 that was                                                                    
reflected in the audit.                                                                                                         
                                                                                                                                
10:24:09 AM                                                                                                                   
                                                                                                                                
Ms.  Curtis responded  that the  chart reflected  the actual                                                                    
numbers,  not  the budget,  which  meant  that the  increase                                                                    
could be  the reflection  of the commission  expending their                                                                    
full  authorization. She  added  that  vacancies were  often                                                                    
reflected by a dip in personal services totals.                                                                                 
                                                                                                                                
10:24:43 AM                                                                                                                   
                                                                                                                                
Ms.  Daniello added  that the  planner 2  position had  been                                                                    
vacant  for  an extended  period  of  time, and  was  vacant                                                                    
during  the  time  when  the  commission  was  preparing  to                                                                    
develop the state  plan. She stressed that  the position was                                                                    
critical to  the development  of the plan,  and it  had been                                                                    
decided that the  position would be contracted  out in order                                                                    
to complete the plan.                                                                                                           
10:25:19 AM                                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon  wondered  how  long  the  position  was                                                                    
vacant.                                                                                                                         
                                                                                                                                
Ms.  Daniello  replied  that the  position  was  vacant  for                                                                    
approximately eight months in 2015.                                                                                             
                                                                                                                                
10:25:37 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon  queried any recommendation  Ms. Daniello                                                                    
could offer on  how to reduce the commission's  budget by at                                                                    
least 20 percent.                                                                                                               
                                                                                                                                
Ms. Daniello  replied that  there could be  a sharing  of an                                                                    
administrative position  with another agency.  She suggested                                                                    
furlough days or a cut to her own salary.                                                                                       
                                                                                                                                
10:26:40 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon  wanted a discussion  to be held  off the                                                                    
record.  She stressed  that it  was  a goal  to analyze  the                                                                    
boards and the costs thereof.  She hoped that there would be                                                                    
a consolidation.                                                                                                                
                                                                                                                                
10:28:14 AM                                                                                                                   
                                                                                                                                
Senator  Olson   hoped  to  discuss  the   subject  further,                                                                    
specifically, how cuts in personnel would affect services.                                                                      
                                                                                                                                
Ms. Curtis  replied that it  depended on how  the commission                                                                    
implemented  the cuts.  She  shared that  there  would be  a                                                                    
consideration of priorities.                                                                                                    
                                                                                                                                
10:30:07 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon discusses housekeeping.                                                                                      
                                                                                                                                
SB  124  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
10:32:03 AM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:32 a.m.                                                                                         
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
SB 101 Briefing Paper.pdf SFIN 3/17/2016 9:00:00 AM
SB 101
SB 101 Transmittal Letter.pdf SFIN 3/17/2016 9:00:00 AM
SB 101
SB0170-Explanation of Changes-Version A to Version W.pdf SFIN 3/17/2016 9:00:00 AM
SB 170
SB0170-Sectional Analysis-Version W.pdf SFIN 3/17/2016 9:00:00 AM
SB 170
SB0170-Sponsor Statement.pdf SFIN 3/17/2016 9:00:00 AM
SB 170
SB0170-Supporting Document-FAQs from DNR-DGGS.pdf SFIN 3/17/2016 9:00:00 AM
SB 170
SB0170-Supporting Document-Letter-DNR-DGGS.pdf SFIN 3/17/2016 9:00:00 AM
SB 170