Legislature(2019 - 2020)SENATE FINANCE 532

03/23/2020 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
**Please Note: All Public Testimony Will be via
Telephone Only. No In-Person Testimony.
From Juneau: 586-9085, Anchorage: 563-9085
Outside Juneau or Anchorage: 844-586-9085
Written Testimony Will be Accepted at:
finance.committee@akleg.gov
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= HB 106 SCHOOL BOND DEBT REIMBURSEMENT TELECONFERENCED
Moved HB 106 Out of Committee
+= HB 96 PIONEERS' HOME AND VETERANS' HOME RATES TELECONFERENCED
Moved SCS CSHB 96(FIN) Out of Committee
+= HB 139 AK PERM. FUND CORP. PROCUREMENT EXEMPTION TELECONFERENCED
Heard & Held
+= HB 235 AK WORKFORCE INVESTMENT BOARD:ALLOCATIONS TELECONFERENCED
Moved SCS CSHB 235(FIN) Out of Committee
                 SENATE FINANCE COMMITTEE                                                                                       
                      March 23, 2020                                                                                            
                         9:13 a.m.                                                                                              
                                                                                                                                
9:13:02 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  von  Imhof  called the  Senate  Finance  Committee                                                                    
meeting to order at 9:13 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Natasha von Imhof, Co-Chair                                                                                             
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Click Bishop                                                                                                            
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
Senator Bill Wielechowski                                                                                                       
Senator David Wilson                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Juli  Lucky,  Staff,  Senator   Natasha  von  Imhof;  Angela                                                                    
Rodell,   Executive   Director,    Alaska   Permanent   Fund                                                                    
Corporation;    Clinton    Lasley,   Deputy    Commissioner,                                                                    
Department  of Health  and  Social Services;  Representative                                                                    
Zach  Fields,  Sponsor;  David Scott,  Staff,  Senator  Bert                                                                    
Stedman;  Representative Adam  Wool,  Sponsor; Miles  Baker,                                                                    
Government Relations, University of Alaska.                                                                                     
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Teri Cothren, Deputy Commissioner,  Department of Health and                                                                    
Social Services                                                                                                                 
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
CSHB 96(FIN)                                                                                                                    
          PIONEERS' HOME AND VETERANS' HOME RATES                                                                               
                                                                                                                                
          SCS CSHB 96(FIN) was REPORTED out of committee                                                                        
          with a "do pass" recommendation and with two                                                                          
          forthcoming   fiscal   impact   notes   from   the                                                                    
          Department of Health and Social Services.                                                                             
                                                                                                                                
HB 106    SCHOOL BOND DEBT REIMBURSEMENT                                                                                        
                                                                                                                                
          HB 106 was REPORTED out  of committee with two "do                                                                    
          pass"   recommendations,   two   "do   not   pass"                                                                    
          recommendations,    three   "no    recommendation"                                                                    
          recommendations and with one  new zero fiscal note                                                                    
          from  the   Department  of  Education   and  Early                                                                    
          Development/Debt Service.                                                                                             
                                                                                                                                
HB 139    AK PERM. FUND CORP. PROCUREMENT EXEMPTION                                                                             
                                                                                                                                
          HB  139  was  HEARD  and  HELD  in  committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
CSHB 235(FIN)                                                                                                                   
     AK WORKFORCE INVESTMENT BOARD:ALLOCATIONS                                                                                  
                                                                                                                                
          SCS CSHB  235(FIN) was  REPORTED out  of committee                                                                    
          with  a  "do  pass" recommendation  and  with  six                                                                    
          previously  published  fiscal   impact  notes:  FN                                                                    
          7(EED),  FN  8(LWF),  FN 9(LWF),  FN  10(LWF),  FN                                                                    
          11(LWF), and FN 12(UA).                                                                                               
                                                                                                                                
HOUSE BILL NO. 139                                                                                                            
                                                                                                                                
     "An  Act   providing  an   exemption  from   the  state                                                                    
     procurement  code for  the  acquisition of  investment-                                                                    
     related  services for  assets managed  by the  Board of                                                                    
    Trustees of the Alaska Permanent Fund Corporation."                                                                         
                                                                                                                                
9:13:23 AM                                                                                                                    
                                                                                                                                
Co-Chair von  Imhof discussed housekeeping. She  assured the                                                                    
committee  that  the  bill would  not  move  from  committee                                                                    
during this meeting.                                                                                                            
                                                                                                                                
9:14:06 AM                                                                                                                    
                                                                                                                                
JULI LUCKY, STAFF,  SENATOR NATASHA VON IMHOF,  spoke to the                                                                    
Committee  Substitute  (CS). She  noted  that  there was  no                                                                    
Explanation of Changes document  as the CS entirely replaced                                                                    
the previous  bill. She  related that  the bill  would still                                                                    
provide  an  exemption  for  certain  contracts  to  provide                                                                    
investment  related  supplies  or services  to  support  the                                                                    
operations  of the  Alaska Permanent  Fund Corporation.  The                                                                    
bill also required a written  determination of the following                                                                    
three factors:                                                                                                                  
                                                                                                                                
     That the contract is in the best interest of the                                                                           
     Alaska Permanent Fund Corporation                                                                                          
                                                                                                                                
     That    the   contract    is   consistent    with   the                                                                    
     responsibilities  of  the  board  of  trustees  of  the                                                                    
     Alaska  Permanent Fund  and  the  corporation under  AS                                                                    
     37.13.120                                                                                                                  
                                                                                                                                
     That the contractor is qualified to provide the                                                                            
     supplies or services                                                                                                       
                                                                                                                                
Ms.  Lucky related  that the  language had  been worked  out                                                                    
between  the   sponsor  and   the  corporation   to  provide                                                                    
sideboards  on the  broad exemption  found  in the  previous                                                                    
version of the bill.                                                                                                            
                                                                                                                                
9:15:13 AM                                                                                                                    
                                                                                                                                
Senator  Wielechowski  thought that  the  CS  made the  bill                                                                    
worse. He stated he was told  the reason for the bill was to                                                                    
be able to react to  immediate circumstances. He thought the                                                                    
CS broadened  the scope to  investment related  supplies and                                                                    
services  and  had  no immediacy  requirement;  furthermore,                                                                    
there was no requirement  that any documentation be provided                                                                    
to  justify  any determination.  He  thought  it was  a  bad                                                                    
policy  to  give a  corporation  with  so much  capital  the                                                                    
ability to  issue sole  source contracts  without oversight.                                                                    
He  relayed  that  he  was  working  on  amendments  to  the                                                                    
legislation.                                                                                                                    
                                                                                                                                
Co-Chair von Imhof solicited comments from Ms. Lucky.                                                                           
                                                                                                                                
Ms. Lucky  deferred to the bill  sponsor, or representatives                                                                    
from the Alaska Permanent  Fund Corporation (APFC). She said                                                                    
that the  corporation and  drafted the  language for  the CS                                                                    
and could speak to the intent.                                                                                                  
                                                                                                                                
Co-Chair von Imhof called upon invited testimony.                                                                               
                                                                                                                                
9:16:46 AM                                                                                                                    
                                                                                                                                
ANGELA  RODELL, EXECUTIVE  DIRECTOR,  ALASKA PERMANENT  FUND                                                                    
CORPORATION, spoke  to the CS.  She explained that  the bill                                                                    
raised  the  standard  under  which  the  corporation  could                                                                    
procure and incorporated the concept  of fiduciary duty. She                                                                    
noted  that fiduciary  duty meant  that the  board could  be                                                                    
held  personally liable  for  acts that  were  in breach  of                                                                    
fiduciary duty;  the state could seek  damages from personal                                                                    
financial  accounts   in  order  to  recover   damages.  She                                                                    
expressed  appreciation for  the committee  and any  support                                                                    
for the CS.                                                                                                                     
                                                                                                                                
9:18:15 AM                                                                                                                    
                                                                                                                                
Senator  Olson asked  whether Ms.  Rodell was  aware of  the                                                                    
sunset provision in the bill.                                                                                                   
                                                                                                                                
Ms. Rodell stated that there  was no sunset provision in the                                                                    
CS.                                                                                                                             
                                                                                                                                
Senator  Olson  referenced  Senator  Wielechowski's  concern                                                                    
about sole-source contracts.                                                                                                    
                                                                                                                                
Ms. Rodell  thought it was  important to remember  that APFC                                                                    
was subject  to the  public records  act. All  the contracts                                                                    
would be subject to the  act requirements and payments under                                                                    
legislative   budget   appropriation.   She   reminded   the                                                                    
committee  that  there  would be  opportunities  to  discuss                                                                    
contracts before they were awarded.                                                                                             
                                                                                                                                
9:19:37 AM                                                                                                                    
                                                                                                                                
Senator Olson asked  whether Ms. Rodell would  be opposed to                                                                    
striking the work supplies from the legislation.                                                                                
                                                                                                                                
Ms.  Rodell  responded that  the  corporation  would not  be                                                                    
opposed to  an amendment  striking the word   supplies  from                                                                    
the CS.                                                                                                                         
                                                                                                                                
9:20:05 AM                                                                                                                    
                                                                                                                                
Senator Hoffman stated  that he had received  the CS minutes                                                                    
ago,  he  requested  more time  to  review  the  legislation                                                                    
before adopting it as a  working document. He requested that                                                                    
committee members be able to  compare the CS to the previous                                                                    
bill version.                                                                                                                   
                                                                                                                                
9:20:39 AM                                                                                                                    
Senator Bishop asked  Ms. Rodell whether there  was a dollar                                                                    
limit of what could be executed under the CS.                                                                                   
                                                                                                                                
Ms. Rodell stated that there was  no dollar limit in the CS,                                                                    
but  there  would  be  in  the sense  that  the  budget  was                                                                    
approved and appropriated by the legislature.                                                                                   
                                                                                                                                
Co-Chair von Imhof asked Ms.  Rodell how the bill would help                                                                    
the corporation.                                                                                                                
                                                                                                                                
Ms.  Rodell explained  to the  committee that  the Permanent                                                                    
Fund  was no  longer  invested  in the  way  it  was at  its                                                                    
inception.  The asset  allocation  had  expanded and  become                                                                    
more  diverse in  securities form  private  equity, to  real                                                                    
estate,  to  public  equity,  to   bonds.  Over  years,  the                                                                    
corporation had  taken more  of the  responsibility in-house                                                                    
rather than allowing third parties  to invest on its behalf.                                                                    
She  asserted  that  in-house  management  allowed  for  the                                                                    
alignment of the  goals of the state  with the corporations                                                                     
strategy,  while   reducing  costs.   The  purpose   of  the                                                                    
exemption  was to  try to  seek all  the tools  necessary to                                                                    
pursue services  in the  most timely,  cost-effective manner                                                                    
possible. She  specified that the procurement  code could be                                                                    
cumbersome  to getting  work done  in a  timely manner.  She                                                                    
asserted  that the  legislation would  give the  corporation                                                                    
the ability to seek services and be exempt from the code.                                                                       
                                                                                                                                
9:23:06 AM                                                                                                                    
                                                                                                                                
Senator  Bishop asked  whether the  CS was  more restrictive                                                                    
than other quasi-state agency policy.                                                                                           
                                                                                                                                
Ms. Rodell  stated that  it was  the corporations  view that                                                                    
the bill  created a higher  standard than what  other boards                                                                    
(AIDEA, AHFC, ARM) were currently  held to because she would                                                                    
be  required  to  make a  written  determination  whether  a                                                                    
contract was  in the best interest  of the fund.   If it was                                                                    
found that  she had violated  the standard, the  state could                                                                    
pursue her personal assets to recoup damages.                                                                                   
                                                                                                                                
9:24:35 AM                                                                                                                    
                                                                                                                                
Senator Wielechowski pointed out  that every corporation had                                                                    
a fiduciary duty,  and such lawsuits to  recoup damages were                                                                    
very  rare. He  asked whether  Ms. Rodell  would support  an                                                                    
amendment  limiting   exemptions  to   emergency  investment                                                                    
services.                                                                                                                       
Ms. Rodell responded in the negative.                                                                                           
                                                                                                                                
Senator Wielechowski asked whether  Ms. Rodell would support                                                                    
the  committee codifying  in state  law the  AHFC and  AIDEA                                                                    
regulations   that   applied    in   emergency   procurement                                                                    
situations.                                                                                                                     
                                                                                                                                
Ms. Rodell answered in the negative.                                                                                            
                                                                                                                                
9:25:26 AM                                                                                                                    
                                                                                                                                
Senator  Hoffman  referenced  Line  9  of  the  bill,  which                                                                    
specified that  contracts must  be in  the best  interest of                                                                    
the  fund. He  summarized Ms.  Rodells  testimony  that what                                                                    
was in  the interest of  the fund might  not be in  the best                                                                    
interest of  the state.  He thought  the legislators  had to                                                                    
protect  what was  in  the  best interest  of  the State  of                                                                    
Alaska. He  wondered whether this could  put the legislature                                                                    
and the corporation at cross purposes.                                                                                          
                                                                                                                                
Ms.  Rodell reiterated  that the  corporation's duty  was to                                                                    
the fund, and  not to the state, and at  times the situation                                                                    
could be conflicted.  She used an example that  it might not                                                                    
be  in  the  best  interest  of the  fund  to  make  certain                                                                    
distributions to the state to  help with the economy because                                                                    
it  would  prohibit  the long-term  investment  returns  and                                                                    
could  violate the  standard of  care  and the  corporations                                                                    
duty to  diversify. She emphasized that  the corporation was                                                                    
mandated through statute to consider the fund first.                                                                            
                                                                                                                                
9:27:49 AM                                                                                                                    
                                                                                                                                
Co-Chair von  Imhof set the  bill aside. She noted  that the                                                                    
CS would  not be adopted.  She stated  that the CS  had been                                                                    
sent   to  members   two  days   prior  and   expressed  her                                                                    
displeasure that  committee members had not  reviewed the CS                                                                    
prior  to the  meeting.  She categorized  the  hearing as  a                                                                    
 show.                                                                                                                          
                                                                                                                                
9:28:12 AM                                                                                                                    
                                                                                                                                
Senator Wielechowski took exception  to Co-Chair von Imhof's                                                                    
statement that the hearing was a show.                                                                                          
                                                                                                                                
Co-Chair von Imhof felt that  the issues raised at the table                                                                    
could  have  been  discussed  prior   to  the  meeting.  She                                                                    
contended that time was limited, and the committee had 3                                                                        
bills left to consider.                                                                                                         
                                                                                                                                
CS FOR HOUSE BILL NO. 96(FIN)                                                                                                 
                                                                                                                                
     "An Act  relating to Alaska  Pioneers' Home  and Alaska                                                                    
     Veterans' Home payments, rates, and services."                                                                             
                                                                                                                                
9:28:37 AM                                                                                                                    
                                                                                                                                
Co-Chair von Imhof shared that the bill had been heard on                                                                       
March 9, 2020. She relayed that a CS had been distributed                                                                       
for consideration.                                                                                                              
                                                                                                                                
Ms. Lucky discussed the changes in the CS. She spoke to an                                                                      
Explanation of Changes document (copy on file):                                                                                 
                                                                                                                                
     The criteria  for the levels  of care are  removed from                                                                    
     statute  and  will  be  defined  by  regulation.  These                                                                    
     changes can  be seen in sections  7, 10, and 11  of the                                                                    
     bill.                                                                                                                      
                                                                                                                                
     NEW: Section  1: Changes the  word "lease" to  "use" to                                                                    
     allow  Pioneer  Homes  more flexibility  in  increasing                                                                    
     revenue with excess space. NEW:                                                                                            
                                                                                                                                
     Section  2:  Decreases the  age  of  eligibility to  60                                                                    
     (from  65)  for  Alaskan  residents  due  to  dementia,                                                                    
     physical disabilities,  and other physical  needs. This                                                                    
     will  allow more  flexibility,  especially in  allowing                                                                    
     spouses to move into the home together.                                                                                    
                                                                                                                                
     AMENDED: Section 7: Two rate caps were increased:                                                                          
     1.  the level  IV rate  was increased  to $9,333  (from                                                                    
     $8,500) in (4); and                                                                                                        
     2. the daily  rate for "respite" care  was increased to                                                                    
     $200 (from $160) in (6).                                                                                                   
                                                                                                                                
     NEW: Effective date of July 1, 2020.                                                                                       
                                                                                                                                
     The  changes to  the  monthly income  threshold in  the                                                                    
     bill  are removed;  income  thresholds  will remain  as                                                                    
     they are  in current  statute. The  language previously                                                                    
     appeared in sections 3 and 4 of the bill.                                                                                  
                                                                                                                                
Ms. Lucky  explained that the  monthly threshold  change had                                                                    
been made  due to  concern that the  rates would  be changed                                                                    
for Pioneer Homes  only and similar facilities  in the state                                                                    
would have a different rate.                                                                                                    
                                                                                                                                
9:32:35 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  asked for clarity regarding  the spendable                                                                    
monthly  allowance  for  residents  who  received  financial                                                                    
assistance.  He  understood  that and  earlier  version  had                                                                    
allowed for $500, the current version allowed for $200.                                                                         
                                                                                                                                
Ms.  Lucky replied  in the  affirmative. She  said that  the                                                                    
previous  bill would  have increased  the amount  a resident                                                                    
could keep to $500 per month.                                                                                                   
                                                                                                                                
Co-Chair Stedman reminded the  committee that the base rates                                                                    
were being  changed. He  asked about the  rate of  growth in                                                                    
the current version.                                                                                                            
                                                                                                                                
Ms. Lucky  deferred to the  Department of Health  and Social                                                                    
Services.                                                                                                                       
                                                                                                                                
9:33:39 AM                                                                                                                    
                                                                                                                                
Co-Chair von Imhof clarified Co-Chair Stedmans question.                                                                        
                                                                                                                                
CLINTON  LASLEY, DEPUTY  COMMISSIONER, DEPARTMENT  OF HEALTH                                                                    
AND SOCIAL SERVICES, stated that in  the CS the rate was not                                                                    
tied to  cost of  living increase  (COLA). He  believed that                                                                    
the bill sponsor could speak to the question.                                                                                   
                                                                                                                                
9:34:41 AM                                                                                                                    
                                                                                                                                
Ms. Lucky stated that the rate  of growth had not changed in                                                                    
the  CS.  The  rate  of  growth remained  the  same  as  the                                                                    
original bill.                                                                                                                  
                                                                                                                                
Co-Chair Stedman asked what the calculation was based on.                                                                       
                                                                                                                                
Ms. Lucky specified that the  amount was the Social Security                                                                    
benefits cost of living.                                                                                                        
                                                                                                                                
Co-Chair von Imhof spoke to the Social Security Act:                                                                            
                                                                                                                                
      under the Social Security Act the department shall                                                                        
     adjust the monthly and daily rates of this section by                                                                      
     percentage equal to the percentage increase in the                                                                         
     cost of living adjustment provided of the Social                                                                           
     Security benefits.                                                                                                         
                                                                                                                                
9:35:45 AM                                                                                                                    
                                                                                                                                
Senator Wielechowski asked whether  there were provisions in                                                                    
the bill requiring notice for rate increases.                                                                                   
                                                                                                                                
Ms.  Lucky responded  in the  negative and  deferred to  the                                                                    
bill sponsor.                                                                                                                   
                                                                                                                                
Co-Chair    von   Imhof    understood   that    notification                                                                    
requirements would be discussed my Mr. Lasley.                                                                                  
                                                                                                                                
9:36:23 AM                                                                                                                    
                                                                                                                                
Mr. Lasley  stated that residential licensing  for the state                                                                    
required at  least 30-days'  notice be  given to  a resident                                                                    
prior  to  a rate  increase.  He  said that  the  department                                                                    
followed this requirement in their practices.                                                                                   
                                                                                                                                
Co-Chair  von  Imhof  understood that  residents  and  their                                                                    
families would receive 30-days notice on rate changes.                                                                          
                                                                                                                                
Mr. Lasley replied in the affirmative.                                                                                          
                                                                                                                                
9:36:55 AM                                                                                                                    
                                                                                                                                
Senator  Olson  asked  whether  the  sponsor  supported  the                                                                    
changes in the current CS.                                                                                                      
                                                                                                                                
Ms. Lucky stated  that the sponsor had been  involved in the                                                                    
crafting of the CS. She  deferred to the sponsor for further                                                                    
clarification.                                                                                                                  
                                                                                                                                
Co-Chair  von Imhof  suggested inviting  the sponsor  to the                                                                    
table.                                                                                                                          
                                                                                                                                
9:37:29 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE ZACH  FIELDS, SPONSOR, expressed  support for                                                                    
the CS.                                                                                                                         
                                                                                                                                
9:37:56 AM                                                                                                                    
                                                                                                                                
Co-Chair   Stedman  MOVED   to   ADOPT  proposed   committee                                                                    
substitute for  CSHB 96(FIN), Work Draft  31-LS0646\E (Marx,                                                                    
3/21/20). There being NO OBJECTION, it was so ordered.                                                                          
                                                                                                                                
9:38:32 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:40:28 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  von Imhof  relayed that  while  the committee  was                                                                    
waiting  for  documents  to be  distributed  Senator  Wilson                                                                    
would speak to Amendment 1, regarding a sunset date.                                                                            
                                                                                                                                
Senator  Wilson MOVED  to ADOPT  Amendment 1,  31-LS0646\E.1                                                                    
(Marx, 3/22/20)  [note: due  to length,  Amendment 1  is not                                                                    
included here. See copy on file].                                                                                               
                                                                                                                                
Senator Wilson spoke  to Amendment 1. He  explained that the                                                                    
amendment  was a  sunset date  for a  five-year repeal.  The                                                                    
sunset date was to ensure that  rates were on track with the                                                                    
consumer price index (CPI).                                                                                                     
                                                                                                                                
Representative Fields stated  he would defer to  the will of                                                                    
the   committee.   He    emphasized   that   stability   and                                                                    
predictability for Pioneer Home  residents was important for                                                                    
the  Pioneer Homes   overall finances.  He did  not see  the                                                                    
need for a sunset, as  the legislature could repeal the bill                                                                    
in the future.                                                                                                                  
                                                                                                                                
9:42:12 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman was concerned  with the aggressiveness that                                                                    
the agency adopted  an escalation in fees. He  did not think                                                                    
the process  had been  long enough nor  had the  public been                                                                    
sufficiently informed.  He relayed  that he was  hesitant to                                                                    
sunset the legislation.  He felt that the  issue should come                                                                    
back to the table in the  future. He contended that the fees                                                                    
were still too high and should be lowered.                                                                                      
                                                                                                                                
Co-Chair  von  Imhof  stated that  the  rate  the  committee                                                                    
considered  was one  of the  lowest rates,  year over  year,                                                                    
compared  to CPI  or medical  CPI. She  affirmed that  if an                                                                    
imbalance  was   found,  the  department  could   alert  the                                                                    
legislature and suggest changes.  She asked for verification                                                                    
the amendment would implement a sunset date of 2025.                                                                            
                                                                                                                                
Senator Wilson responded affirmatively.                                                                                         
                                                                                                                                
Co-Chair von Imhof MAINTAINED her OBJECTION.                                                                                    
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Wilson                                                                                                                
OPPOSED: Olson, Wielechowski,  Bishop, Hoffman, Stedman, von                                                                    
Imhof                                                                                                                           
                                                                                                                                
The MOTION to adopt Amendment 1 FAILED (1/6).                                                                                   
                                                                                                                                
9:45:02 AM                                                                                                                    
                                                                                                                                
Senator  Wilson MOVED  to ADOPT  Amendment 2,  31-LS0646\E.2                                                                    
(Marx, 3/21/20) (copy on file):                                                                                                 
                                                                                                                                
     Page 4, line 9:                                                                                                            
     Delete "$9,333 a month"                                                                                                    
     Insert "a monthly rate the department considers                                                                            
     sufficient to compensate the state for the cost of                                                                         
     care and support of the person at the home"                                                                                
                                                                                                                                
Co-Chair von Imhof OBJECTED for discussion.                                                                                     
                                                                                                                                
Senator Wilson spoke to the amendment.                                                                                          
                                                                                                                                
9:46:57 AM                                                                                                                    
                                                                                                                                
Representative  Fields did  not  support  the amendment.  He                                                                    
reminded  that  individuals in  Level  4  care were  already                                                                    
experiencing  large  rate increases.  He  said  that the  CS                                                                    
contained a  sizeable rate increase for  those residents who                                                                    
had been at  Level 3 under previous rate  structures. He did                                                                    
not support  uncapping the rate increase  and reiterated the                                                                    
need for  stability and predictability  in rate levels.   He                                                                    
said that  the state  should be trying  to get  more revenue                                                                    
for  skilled nursing  level  care, but  he  believed that  a                                                                    
better way to do that would  be for the department to pursue                                                                    
certification for the nursing home level of care.                                                                               
                                                                                                                                
9:48:27 AM                                                                                                                    
                                                                                                                                
Senator  Wilson lamented  that he  had not  received answers                                                                    
from questions he had submitted to the department.                                                                              
                                                                                                                                
Co-Chair  von Imhof  queried whether  Level  4 patients  had                                                                    
left facilitates due to the rate increase.                                                                                      
                                                                                                                                
Mr. Lasley  stated that the  number of individuals  that had                                                                    
moved   out  of   the  Pioneer   Homes   system  since   the                                                                    
announcement of  the rate  increase on  August 1,  2019, was                                                                    
24.  He said  that  18  were directly  related  to the  rate                                                                    
increase. He stated that he  would get back to the committee                                                                    
about Level 4 patients specifically.                                                                                            
                                                                                                                                
Co-Chair  von  Imhof found  it  interesting  that the  state                                                                    
already provided  subsidies for various populations  such as                                                                    
students,  special-needs  students,  college  students,  and                                                                    
many  kinds of  transportations. She  acknowledged that  the                                                                    
rates in the bill had increased  rates for Level 4 care. She                                                                    
recalled conversations  about the distribution of  PFDs that                                                                    
suggested  that  $2000  could stand  between  starvation  or                                                                    
hypothermia. She countered that  the bill would make elderly                                                                    
people pay an additional $4000, per month, for care.                                                                            
                                                                                                                                
9:51:29 AM                                                                                                                    
                                                                                                                                
Senator  Olson  referenced  the  24  people  that  left  the                                                                    
Pioneer  Homes  and  asked   whether  there  were  currently                                                                    
vacancies.                                                                                                                      
                                                                                                                                
Ms.  Lasley  confirmed  that there  were  vacancies  in  all                                                                    
Pioneer  Homes across  the state.  He noted  that there  was                                                                    
currently about a 91 percent occupancy rate.                                                                                    
                                                                                                                                
Senator Olson  thought if the  idea was to  increase revenue                                                                    
to  the state,  the state  should  be working  to keep  that                                                                    
occupancy rate a 99 percent.                                                                                                    
                                                                                                                                
Co-Chair von Imhof  added that when running  the numbers, if                                                                    
a  person had  a certain  level of  assets, and  was charged                                                                    
$13,000  per  month  rather than  $9,000,  the  state  would                                                                    
subsidize them for  less time. The assets  would last longer                                                                    
paying slightly less than full  rate and the state paid less                                                                    
overtime.                                                                                                                       
                                                                                                                                
Senator Olson maintained his opinion.                                                                                           
                                                                                                                                
9:53:06 AM                                                                                                                    
                                                                                                                                
9:53:08 AM                                                                                                                    
                                                                                                                                
Co-Chair von Imhof MAINTAINED her OBJECTION.                                                                                    
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Wilson                                                                                                                
OPPOSED:  Olson, Wielechowski,  Bishop, Hoffman,  von Imhof,                                                                    
Stedman                                                                                                                         
                                                                                                                                
The MOTION to adopt Amendment 2 FAILED (1/6).                                                                                   
                                                                                                                                
9:53:34 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:53:51 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair von  Imhof noted that  Amendment 2 had  failed, and                                                                    
Co-Chair Stedman would offer a conceptual amendment.                                                                            
                                                                                                                                
Co-Chair Stedman  MOVED to ADOPT Conceptual  Amendment 1. He                                                                    
explained  that  the original  bill  had  included $500  for                                                                    
spend money  for Pioneer Home  residents. The amount  in the                                                                    
current  bill was  $200. The  amendment  would increase  the                                                                    
amount by $100 to a total of $300 per month.                                                                                    
                                                                                                                                
Co-Chair von Imhof OBJECTED for discussion.                                                                                     
                                                                                                                                
Representative Fields asked the  department what the maximum                                                                    
level   residents  could   collect   without  any   negative                                                                    
unintended consequences in terms  of Medicaid eligibility or                                                                    
other.                                                                                                                          
                                                                                                                                
Ms. Lasley stated  that the department would  not be opposed                                                                    
to raising the amount.                                                                                                          
                                                                                                                                
Representative Fields thought  the conceptual amendment made                                                                    
sense.                                                                                                                          
                                                                                                                                
9:55:40 AM                                                                                                                    
                                                                                                                                
Senator  Olson reiterated  the question  about any  negative                                                                    
consequences due to the raise from $200 to $300.                                                                                
                                                                                                                                
Mr. Lasley addressed the previously  proposed $500 limit for                                                                    
monthly spending.  He stated  that the  long-term unintended                                                                    
consequences for the $500 limit  pushed against the limit of                                                                    
assets an  elder could  have and  qualify for  Medicaid. The                                                                    
worry was that  if the elder could not spend  the money each                                                                    
month,  they  could build  up  assets  that could  get  them                                                                    
kicked  out  of the  program  and  disqualify them  for  the                                                                    
Medicaid  program. He  did  not feel  that  the $300  amount                                                                    
would have unintended consequences for residents.                                                                               
                                                                                                                                
9:56:58 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  recognized that there had  been an erosion                                                                    
of purchasing power  for seniors and it was  good for elders                                                                    
and seniors to participate  in gift-giving for birthdays and                                                                    
Christmas or visit  a hair salon using their  $300 per month                                                                    
spending  money. He  said that  residents  in Pioneer  Homes                                                                    
would  not be  able to  hoard  cash and  giving seniors  the                                                                    
ability to have spending money was important.                                                                                   
                                                                                                                                
9:58:18 AM                                                                                                                    
                                                                                                                                
Ms. Lucky  wanted to confirm  that the  conceptual amendment                                                                    
would be  on page 2,  line 7 and  on page  2, line 28.   The                                                                    
amount of $200 would change to $300 on each of those pages.                                                                     
                                                                                                                                
Co-Chair Stedman thought the amount  also appeared on page 4                                                                    
of the bill, line 13.                                                                                                           
                                                                                                                                
Ms. Lucky  understood that Co-Chair Stedman's  reference was                                                                    
to a respite charge and not  an asset limit. She deferred to                                                                    
the department for clarification.                                                                                               
                                                                                                                                
Ms. Lucky  asked if Mr.  Lasley could confirm  the reference                                                                    
on page 4, line 13.                                                                                                             
                                                                                                                                
Mr. Lasley confirmed  that the $200 respite  charge found on                                                                    
page  4, line  13 did  not  relate to  the monthly  spending                                                                    
amount referenced in Co-Chair Stedman's amendment.                                                                              
                                                                                                                                
Co-Chair von  Imhof WITHDREW her  OBJECTION. There  being NO                                                                    
further OBJECTION, Conceptual Amendment 1 was ADOPTED.                                                                          
                                                                                                                                
10:00:37 AM                                                                                                                   
                                                                                                                                
Mr. Lasley  announced that an  updated fiscal note  from the                                                                    
department would be provided to the committee.                                                                                  
                                                                                                                                
Co-Chair von Imhof requested a motion to move the bill.                                                                         
                                                                                                                                
Co-Chair Stedman  MOVED to  report SCS  CSHB 96(FIN)  out of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
SCS CSHB  96(FIN) was REPORTED  out of committee with  a "do                                                                    
pass" recommendation and with  two forthcoming fiscal impact                                                                    
notes from the Department of Health and Social Services.                                                                        
                                                                                                                                
HOUSE BILL NO. 106                                                                                                            
                                                                                                                                
     "An Act relating to school bond debt reimbursement."                                                                       
                                                                                                                                
10:02:23 AM                                                                                                                   
                                                                                                                                
Co-Chair von  Imhof discussed the bills   hearing history in                                                                    
committee. She said that the  debt reimbursement program had                                                                    
been  successful  and  had allowed  municipal  districts  to                                                                    
prioritize,  maintain  and  build needed  schools  with  the                                                                    
approval and  participation of local taxpayers  and included                                                                    
a certain amount  of reimbursement from the  state. She said                                                                    
that  due to  economic  pressure, a  moratorium  was put  in                                                                    
place  5 years  ago. Since  then the  legislature had  fully                                                                    
funding payment on  existing debt prior to 2015  and has not                                                                    
allowed new projects  into the program since  then. She said                                                                    
that this year, payments for  existing debt were cut in half                                                                    
by  a  veto.  The legislatures   proposed  operating  budget                                                                    
fully  funded  the  program  but  with  the  uncertainty  of                                                                    
potential   executive  action,   as  well   as  the   fiscal                                                                    
uncertainty of the state, a  pause would be necessary on any                                                                    
new  constructions for  schools. The  bill would  extend the                                                                    
moratorium another 5  years. She stressed that  the goal was                                                                    
to  revise the  program  for consideration  during the  next                                                                    
legislative session.  She asked  that the committee  pass HB                                                                    
106 in its  current form. She noted that  there were invited                                                                    
testifiers online to answer questions.                                                                                          
                                                                                                                                
Co-Chair Stedman  MOVED to  report HB  106 out  of Committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note. There being NO OBJECTION, it was so ordered.                                                                              
                                                                                                                                
HB  106 was  REPORTED out  of committee  with two  "do pass"                                                                    
recommendations,  two "do  not pass"  recommendations, three                                                                    
"no recommendation"  recommendations and  with one  new zero                                                                    
fiscal  note  from the  Department  of  Education and  Early                                                                    
Development/Debt Service.                                                                                                       
CS FOR HOUSE BILL NO. 235(FIN)                                                                                                
                                                                                                                                
     "An Act relating to allocations of funding for the                                                                         
     Alaska Workforce Investment Board; and providing for                                                                       
     an effective date."                                                                                                        
                                                                                                                                
10:05:00 AM                                                                                                                   
                                                                                                                                
Co-Chair  von  Imhof  announced  that  a  new  CS  would  be                                                                    
presented to the committee for consideration.                                                                                   
                                                                                                                                
DAVID SCOTT,  STAFF, SENATOR BERT STEDMAN,  discussed the CS                                                                    
being considered. He relayed that  the CS made one change on                                                                    
Page 1,  line 6,  changing the effective  date from  2023 to                                                                    
2021.                                                                                                                           
                                                                                                                                
10:06:08 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:06:22 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair von Imhof  asked the committee to  support the one-                                                                    
year extension  and address  the issue  further in  the next                                                                    
legislative session.                                                                                                            
                                                                                                                                
Co-Chair   Stedman  MOVED   to   ADOPT  proposed   committee                                                                    
substitute  for   CSHB  235(FIN),  Work   Draft  31-LS1480\O                                                                    
(Wayne,  3/20/20).  There  being  NO OBJECTION,  it  was  so                                                                    
ordered.                                                                                                                        
                                                                                                                                
Co-Chair von Imhof asked to hear from the bill sponsor.                                                                         
                                                                                                                                
REPRESENTATIVE ADAM WOOL, SPONSOR,  supported the changes in                                                                    
the CS.                                                                                                                         
                                                                                                                                
Mr. Scott  explained that  the fiscal  note attached  to the                                                                    
bill showed zero fiscal impact  in the out years. This would                                                                    
be updated  when the legislature  took up the matter  in the                                                                    
next legislative session.                                                                                                       
                                                                                                                                
10:08:34 AM                                                                                                                   
                                                                                                                                
Co-Chair von Imhof OPENED public testimony.                                                                                     
                                                                                                                                
TERI COTHREN, DEPUTY COMMISSIONER,  DEPARTMENT OF HEALTH AND                                                                    
SOCIAL  SERVICES   (via  teleconference),  stated   she  was                                                                    
available  for questions.  She  stated  that the  University                                                                    
supported the bill.                                                                                                             
                                                                                                                                
10:09:27 AM                                                                                                                   
                                                                                                                                
MILES  BAKER, GOVERNMENT  RELATIONS,  UNIVERSITY OF  ALASKA,                                                                    
stated  that he  was available  for questions  pertaining to                                                                    
the fiscal note.                                                                                                                
                                                                                                                                
10:10:16 AM                                                                                                                   
                                                                                                                                
Co-Chair von Imhof CLOSED public testimony.                                                                                     
                                                                                                                                
Co-Chair  Stedman   addressed  FN  7,  from   Department  of                                                                    
Education and Early Development, OMB Component 2796:                                                                            
                                                                                                                                
     This  bill  extends  the length  of  time  to  disperse                                                                    
     Technical  and   Vocational  Education   Program  funds                                                                    
     appropriated for  distribution to  various institutions                                                                    
     for adult  and higher education  from June 30,  2020 to                                                                    
     June 30, 2023.                                                                                                             
                                                                                                                                
Co-Chair  Stedman addressed  FN  8, from  the Department  of                                                                    
Labor and Workforce Development, OMB Component 2659:                                                                            
                                                                                                                                
     This legislation  extends the sunset date  for existing                                                                    
     funding    allocations    for   program    and    grant                                                                    
     distributions  under  AS  23.15.835(d) for  the  Alaska                                                                    
     Technical  and  Vocational   Education  Program  (TVEP)                                                                    
     through June  30, 2023.  Funding authorization  for the                                                                    
     TVEP  recipients was  included in  the FY2021  Governor                                                                    
     Amended request.                                                                                                           
                                                                                                                                
Co-Chair  Stedman addressed  FN  9, from  the Department  of                                                                    
Labor and Workforce Development, OMB Component 3117:                                                                            
                                                                                                                                
     This   legislation  does   not   change  the   budgeted                                                                    
     authorization  needed  for  the  Workforce  Development                                                                    
     component.                                                                                                                 
                                                                                                                                
Co-Chair  Stedman addressed  FN 11,  from the  Department of                                                                    
Labor and Workforce Development, OMB Component 2276.                                                                            
                                                                                                                                
Co-Chair  Stedman addressed  FN  10, for  the Department  of                                                                    
Labor and Workforce Development, OMB Component 2686.                                                                            
Co-Chair  Stedman addressed  FN  12, for  the University  of                                                                    
Alaska, OMB Component 1296.                                                                                                     
                                                                                                                                
10:13:11 AM                                                                                                                   
                                                                                                                                
Senator  Hoffman pointed  out  that the  fiscal notes  would                                                                    
need to be updated to reflect the one-year extension.                                                                           
                                                                                                                                
Co-Chair von Imhof agreed.                                                                                                      
                                                                                                                                
10:13:23 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:13:38 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Stedman  MOVED to report  SCS CSHB 235(FIN)  out of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
SCS CSHB 235(FIN)  was REPORTED out of committee  with a "do                                                                    
pass"  recommendation  and  with  six  previously  published                                                                    
fiscal impact  notes: FN  7(EED), FN  8(LWF), FN  9(LWF), FN                                                                    
10(LWF), FN 11(LWF), and FN 12(UA).                                                                                             
                                                                                                                                
10:14:10 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:14:17 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair von  Imhof informed that the  committee would stand                                                                    
in recess.                                                                                                                      
                                                                                                                                
10:14:28 AM                                                                                                                   
RECESSED                                                                                                                        
                                                                                                                                
[Co-Chair von Imhof ADJOURNED the meeting at 5:10pm]                                                                            
                                                                                                                                
ADJOURNMENT                                                                                                                   
10:14:56 AM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 5:10 p.m.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
HB 96 Work Draft v. E 3.21.2020 Explanation of Changes.pdf SFIN 3/23/2020 9:00:00 AM
HB 96
HB 96 Work Draft v. E 3.21.2020.pdf SFIN 3/23/2020 9:00:00 AM
HB 96
HB 235 Sponsor Statement 2.21.2020.pdf SFIN 3/23/2020 9:00:00 AM
HB 235
HB 235 Support Letters provided by Sponsor.pdf SFIN 3/23/2020 9:00:00 AM
HB 235
HB 235 TVEP Annual Report 2019.pdf SFIN 3/23/2020 9:00:00 AM
HB 235
HB 235.Backup Flow Chart 2.21.2020.pdf SFIN 3/23/2020 9:00:00 AM
HB 235
HB 235 work draft version O.pdf SFIN 3/23/2020 9:00:00 AM
HB 235
HB 139 Work Draft v. S 3.20.2020.pdf SFIN 3/23/2020 9:00:00 AM
HB 139