Legislature(2001 - 2002)
04/23/2002 04:37 PM Senate FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 23, 2002
4:37 PM
TAPES
SFC-02 # 74, Side A
CALL TO ORDER
Co-Chair Pete Kelly convened the meeting at approximately 4:37 PM.
PRESENT
Senator Dave Donley, Co-Chair
Senator Pete Kelly, Co-Chair
Senator Jerry Ward, Vice Chair
Senator Lyda Green
Senator Gary Wilken
Senator Alan Austerman
Senator Donald Olson
Senator Loren Leman
Also Attending: DR. JOHN MIDDAUGH, Consultant, Department of Health
and Social Services; NANCY WELLER, Unit Manager, State, Federal &
Tribal Relations, Division of Medical Assistance, Department of
Health and Social Services; JOHN BITNEY, Legislative Liaison,
Alaska Housing Finance Corporation, Department of Revenue
Attending via Teleconference: From Anchorage: JENNIFER RUDINGER,
Executive Director, Alaska Civil Liberties Union; PAULINE UTTER
SUMMARY INFORMATION
SB 364-MEDICAID PAYMENTS FOR ABORTIONS
The Committee heard testimony from the public and the Department of
Health and Social Services. The bill was reported from Committee.
SB 360-ALASKA NATURAL GAS PROJECT ACT
This bill was scheduled but not heard.
HB 160-REPORTING OF ABORTIONS
This bill was scheduled but not heard.
SB 181-SMALL COMMUNITY HOUSING LOANS
The Committee heard from the Alaska Housing Finance Corporation,
considered and adopted one amendment, and reported the bill from
Committee.
HB 106-FINANCIAL INSTITUTIONS
The bill was reported from Committee.
SENATE BILL NO. 364
"An Act relating to medical services under the state Medicaid
program."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Kelly stated this bill mirrors guidelines established by
the federal Supreme Court regarding public funding of abortion;
moreover, it encompasses Alaska statutes and language incorporated
into the FY 02 State budget. He voiced the need for "the State" to
maintain its position on procreation; however, he commented the
Alaska Court System has repeatedly undermined the Legislature's
position through such things as the definition of "medically
necessary." He stated most people think of the term "medically
necessary" as applying to a health condition; however, the Court
has repeatedly interpreted it a broad sense whereby a
psychologically upset individual would qualify. He stated that
Section 1, subsection (b) states written certification by a
treating physician must accompany the claim submitted to the State
for payment for a medically necessary abortion, and he detailed the
bill's specified medical conditions.
JENNIFER RUDINGER, Executive Director, Alaska Civil Liberties
Union, testified via teleconference from Anchorage in opposition to
SB 364. She stated the Union has represented Planned Parenthood and
local physicians in abortion-related lawsuits against the State.
She contented there are language issues she would like to address
including: the use of adjectives that are "vague and unworkable"
such as "significantly aggravated," and "adverse physical
condition;" and who would make the determination as to the factors
that constitute "serious danger." She specified that the Alaska
Civil Liberties Union believes the patient should decide what is
significant "since she is the one who will be suffering this
significantly aggravated health problem."
Ms. Rudinger furthered that this bill would exacerbate already
difficult dealings with insurance companies over claim denials. She
stated the word "would" used repeatedly in this document is
problematic, and suggested this word be changed to "could." She
stated physicians and lawyers often speak in probabilities and tell
clients what might happen, not what would happen. She stressed that
if a woman has to wait until the doctor could firmly state the
pregnancy would be harmful, the procedures might be more expensive
and the abortion more dangerous to perform.
PAULINE UTTER, testified via teleconference from Anchorage, and
read a letter from Dr. Kathleen Todd [copy not provided], a Valdez
physician, urging the Committee not to pass SB 364 as "this bill
excludes any consideration of fetal anomalies as a legitimate
reason for abortion" which many women consider legitimate. She
continued that the bill's language additionally would require a
physician to reach a point of certainty before taking action, and
stated the government must stay neutral and not allow any entity to
oppose a woman's desire to have an abortion.
DR. JOHN MIDDAUGH, Consultant, Department of Health and Social
Services, stated he is a physician certified in internal and
preventive medicine and, on behalf of the Department, is speaking
in opposition to SB 364. He stated, as a physician, the bill's
language is difficult to interpret and to apply. He additionally
stressed the bill does not recognize the uniqueness of each patient
as "one size" does not "fit all" in health issues. He asserted
there could be numerous factors involved which make it very
difficult for physicians to be 100 percent sure of circumstances,
and he noted the omission of language addressing "a pregnant woman
carrying an infant" with abnormal medical conditions that "were not
compatible with survival." He asserted that negotiating for
reimbursement with an insurance company about the abortion decision
made between the doctor and patient is not easy to do. He urged the
Committee not to proceed with this version of SB 364.
Co-Chair Kelly voiced that Dr. Middaugh's concerns are addressed in
the bill, and furthered that if the regulations remain as they
currently are, "there is really nothing to stop wholesale elective
abortions being funded by the State, which is going on now." He
asserted the current regulation wording "is so broad that you could
perform an abortion just about based on anything with that
regulation."
Dr. Middaugh replied, "the answer would only be if in that judgment
between the physician and the patient resulted in a conclusion to
meet the medical criteria that that was a medically needed or
therapeutically indicated procedure."
Co-Chair Kelly asked Dr. Middaugh for further clarification.
Dr. Middaugh responded that in his professional opinion, he does
"not believe that there are abortions, elective abortions, being
paid for by the State." He understood this is the intent of this
bill; however, he voiced "that the wording that goes beyond
'medical necessary' is very problematic, is very difficult to
interpret, and in fact doesn't adequately, in its wording, take
into account many of the very serious circumstances that could
arise between a physician and a patient in this area."
Senator Leman inquired if Dr. Middaugh considered it
"inappropriate" "to have any constraints as a matter of public
policy" on a patient and doctor relationship as he understood Dr.
Middaugh to be saying "leave us alone, I'm a doctor, here's a
patient, you don't know my business as well as I do."
Senator Leman furthered, "should we take our statutes that we have
now that speak to medical practice and throw them out."
Dr. Middaugh responded "it is absolutely necessary to have
standards of medical practice and that it is very appropriate to
assure that there is certification by a treating physician of
medical necessity or therapeutically indicated." He continued that
nationally, physicians' competency and exercise of their "medical
and professional relationship and discharge of those obligations"
are scrutinized. He reiterated there is a need for standards.
Dr. Middaugh identified language in Section 1, subsection (b) "as
being problematic for physicians to attempt to use those wordings
in the way that they have been put forward to achieve that."
Section 1, subsection (b) language reads as follows.
(b) A claim for payment for a medically necessary
abortion that is submitted to the Department must be
accompanied by a written certification by the treating
physician that the abortion is medically necessary to treat a
serious
(1) adverse physical condition of a pregnant woman
that
(A) either is caused by the pregnancy or would
be significantly aggravated by continuation of the
pregnancy; and
(B) would seriously endanger the physical
health of the woman if the pregnancy were not terminated
by an abortion; or
(2) psychological illness of a pregnant woman who
requires medication for treatment of the illness if
(A) the medication required to treat the
illness would be highly dangerous to the fetus; and
(B) the health of the woman would be
endangered if the medication was not taken during the
pregnancy.
Senator Leman asked Dr. Middaugh if he has suggested amendments.
Dr. Middaugh recommended that deleting all text following
"medically necessary" in Section 1, subsection (b), line 12 through
subsection (B) on page two, line 8, would be acceptable to the
Department and to physicians.
This language reads as follows.
"…to treat a serious
(1) adverse physical condition of a pregnant woman
that
(A) either is caused by the pregnancy or would
be significantly aggravated by continuation of the
pregnancy; and
(B) would seriously endanger the physical
health of the woman if the pregnancy were not terminated
by an abortion; or"
(2) psychological illness of a pregnant woman who
requires medication for treatment of the illness if
(A) the medication required to treat the
illness would be highly dangerous to the fetus; and
(B) the health of the woman would be
endangered if the medication was not taken during the
pregnancy."
Co-Chair Kelly responded those deletions would allow "the same kind
of regulations that have been written that deal with psychological
health which have, in our opinion and many at this table, resulted
in the lack of abortions…its just too broad." He continued that
"you could say that someone being stressed out because they are
pregnant works for psychological health." He stated the State
should not be paying for an abortion of this nature." He summarized
if the language identified by Dr. Middaugh is deleted, there would
be no reason to pass this bill.
Dr. Middaugh stated the standards for doctors today and
patient/doctor interactions "in the process of informed consent
convey a far higher level of integrity than your comment would give
them credit to." He stressed that the standard of performance for
physicians is "pretty high," and passage of this bill without the
language he identified would be a powerful affirmation message to
the medical community and people of Alaska.
NANCY WELLER, Unit Manager, State, Federal & Tribal Relations,
Division of Medical Assistance, Department of Health and Social
Services, informed the Committee that the Department is presenting
an indeterminate fiscal note for this bill because of the
difficulty in determining a "believable estimate" as the Department
has no knowledge of how this legislation would affect decisions
made between a woman and her doctor regarding a medically necessary
abortion nor how many women would elect to carry a baby to term and
have Medicaid cover the cost of the birth.
AT EASE 5:00 PM/ 5:03 PM
Senator Ward offered a motion to "move SB 364 out of Committee with
individual recommendations and accompanying note."
A roll call was taken on the motion.
IN FAVOR: Senator Green, Senator Leman, Senator Olson, Senator
Ward, Senator Wilken, Co-Chair Kelly
OPPOSED: Senator Austerman, Co-Chair Donley
ABSENT: Senator Hoffman
The motion PASSED (6-2-1)
SB 364 was REPORTED from Committee with accompanying indeterminate
fiscal note, dated 4/22/02, from the Department of Health and
Social Services.
SENATE BILL NO. 181
"An Act making the interest rate for the Alaska Housing
Finance Corporation's small community housing mortgage loans
the same as the interest rate on mortgage loans purchased
under the corporation's special mortgage loan purchase program
from the proceeds of the most recent applicable issue of
taxable bonds before the origination or purchase of the small
community housing mortgage loans."
This was the fifth hearing for this bill in the Senate Finance
Committee.
Co-Chair Kelly noted this is the second year of hearings on this
bill and that several Committee members have been working with the
Alaska Housing Finance Corporation (AHFC) to address the rural
housing loan program concerns raised by Committee members.
Co-Chair Donley stated the bill addresses the two following issues:
the first regarding loans used to build "very very expensive
houses" by limiting the subsidized portion of the loan to that
portion up to the statewide housing average; and the second issue
expanding the non-owner occupied language to allow the Rural
Housing Assistance Loan Fund program (HALF) to be "utilized for low
cost loans for teacher housing" in rural and small communities.
Co-Chair Donley moved to adopt CS SB 181, 22-LS0488\G as a working
draft.
There being no objection, Version "G" was ADOPTED.
Senator Green inquired if the language allowing for teacher-housing
loans applies to houses owned by one party but rented or leased to
teachers.
Co-Chair Donley responded if a certified teacher occupies the home,
the home would qualify for financing under the loan program.
Senator Green asked if this language includes "classified" school
employees.
Co-Chair Donley clarified it only applies to teachers.
Senator Green asked if a person in the process of acquiring teacher
certification would qualify.
Co-Chair Kelly believed this scenario would be a subject-need
certification and voiced support for their inclusion.
Senator Green voiced this would be an important provision.
Co-Chair Kelly concurred.
JOHN BITNEY, Legislative Liaison, Alaska Housing Finance
Corporation, Department of Revenue suggested adding language to the
owner-occupied portion of the program on page one, line 13. He
informed the Committee "that definitions and subsequent parts of
statutes allow for up to a duplex;" therefore, wording the section
to allow for a "single-family or a duplex would have that same cut-
off level."
Co-Chair Donley qualified this would be acceptable as long as it
specifies owner-occupied duplex.
Mr. Bitney responded this is addressed in subsequent statute that
defines the term "housing" under this section.
Co-Chair Donley stated he would support this change if it would
generate AHFC's support for the bill.
Mr. Bitney stated this change would further define the bill and
allow AHFC "to apply the same threshold level for a duplex as we
would for a single family" home.
Amendment #4: This amendment further defines the types of
qualifying housing for AHFC small community loans by inserting "or
owner occupied duplex" following "single-family house" on page one,
Section 1, lines 13 and 14.
Co-Chair Donley moved for adoption of Amendment #4.
There being no objection, Amendment #4 was ADOPTED.
Mr. Bitney stated AHFC has been working with the Department of
Labor and Workforce Development to develop a "working number" for
the subsidized loan program, and the Department of Labor and
Workforce Development has provided an estimate of $185,000 as the
statewide average sales price of a single family home.
Senator Olson inquired how the transient nature of teachers in
small communities would affect the provision for teacher occupied
housing.
Co-Chair Donley responded Section 2 of the bill allows for non-
owner occupancy of a house if a teacher occupies it. He elaborated
that a community, a private individual, or a teacher could build
the house as long as a teacher occupies it.
Mr. Bitney explained to the Committee that the intent of this
program is to offer to the borrower a commitment for a period of
time, usually 160 to 180 days, during which they could secure
construction financing from a commercial bank. He stated, "once the
terms of the commitment have been met, the construction has been
done, then the takeout on the loan." He remarked this commitment
practice is the industry standard for new home construction.
Co-Chair Donley offered a motion to move "CS SB 181 as amended and
the accompanying zero fiscal note from Committee with individual
recommendations."
There being no objections, CS SB 181 (FIN) was REPORTED from
Committee with a new zero fiscal note dated 1/28/02 from the
Department of Revenue.
SENATE CS FOR CS FOR HOUSE BILL NO. 106(JUD)
"An Act relating to the authorizations for certain state
financial institutions of certain powers and limitations;
relating to confidential records of depositors and customers
of certain financial institutions; relating to the examination
of certain institutions subject to AS 06; relating to the
Alaska Banking Code, Mutual Savings Bank Act, Alaska Small
Loans Act, and Alaska Credit Union Act; relating to credit
cards; amending Rule 45, Alaska Rules of Civil Procedure,
Rules 17 and 37, Alaska Rules of Criminal Procedure, and Rule
24, Alaska Bar Rules; and providing for an effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
Senator Leman offered a motion to report SCS CS HB 106 "from
Committee with individual recommendations and the accompanying zero
fiscal note."
There being no objection, SCS CS HB 106 (FIN) with a new zero
fiscal note, dated 2/26/02 from the Department of Community and
Economic Development was REPORTED from Committee.
ADJOURNMENT
Co-Chair Pete Kelly adjourned the meeting at 05:15 PM.
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