Legislature(2005 - 2006)BUTROVICH 205

04/06/2005 01:30 PM Senate HEALTH, EDUCATION & SOCIAL SERVICES


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 125 LICENSING MEDICAL OR CARE FACILITIES TELECONFERENCED
Heard & Held
*+ SB 150 ALASKA CHILDREN'S TRUST FUND GRANTS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= SB 10 PARENTAL LIABILITY FOR CHILD'S DAMAGE TELECONFERENCED
Scheduled But Not Heard
                    ALASKA STATE LEGISLATURE                                                                                  
SENATE HEALTH, EDUCATION AND SOCIAL SERVICES STANDING COMMITTEE                                                               
                         April 6, 2005                                                                                          
                           1:36 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Fred Dyson, Chair                                                                                                       
Senator Lyda Green                                                                                                              
Senator Kim Elton                                                                                                               
Senator Donny Olson                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Gary Wilken, Vice Chair                                                                                                 
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                              
SENATE BILL NO. 125                                                                                                             
"An Act  relating to the licensing,  regulation, enforcement, and                                                               
appeal  rights of  ambulatory surgical  centers, assisted  living                                                               
homes, child  care facilities,  child placement  agencies, foster                                                               
homes,  free-standing   birth  centers,  home   health  agencies,                                                               
hospices  or  agencies  providing  hospice  services,  hospitals,                                                               
intermediate   care  facilities   for   the  mentally   retarded,                                                               
maternity  homes,  nursing  facilities,  residential  child  care                                                               
facilities, residential psychiatric  treatment centers, and rural                                                               
health clinics; relating to criminal  history requirements, and a                                                               
registry, regarding certain  licenses, certifications, approvals,                                                               
and  authorizations  by  the  Department  of  Health  and  Social                                                               
Services;  making conforming  amendments;  and  providing for  an                                                               
effective date."                                                                                                                
                                                                                                                                
     HEARD AND HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 150                                                                                                             
"An Act  repealing the limits  on grants awarded from  the Alaska                                                               
children's trust fund."                                                                                                         
                                                                                                                                
     HEARD AND HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 10                                                                                                              
"An  Act relating  to liability  for destruction  of property  by                                                               
unemancipated minors; and providing for an effective date."                                                                     
                                                                                                                                
     SCHEDULED BUT NOT HEARD                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 125                                                                                                                  
SHORT TITLE: LICENSING MEDICAL OR CARE FACILITIES                                                                               
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
03/02/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/02/05       (S)       HES, JUD, FIN                                                                                          
03/14/05       (S)       HES AT 1:30 PM BUTROVICH 205                                                                           
03/14/05       (S)       Heard & Held                                                                                           
03/14/05       (S)       MINUTE(HES)                                                                                            
04/06/05       (S)       HES AT 1:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: SB 150                                                                                                                  
SHORT TITLE: ALASKA CHILDREN'S TRUST FUND GRANTS                                                                                
SPONSOR(s): HEALTH, EDUCATION & SOCIAL SERVICES                                                                                 
                                                                                                                                
03/21/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/21/05       (S)       HES, FIN                                                                                               
04/06/05       (S)       HES AT 1:30 PM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Dr. Richard Mandsager, Director                                                                                                 
Division of Public Health                                                                                                       
Department of Health & Social Services                                                                                          
PO Box 110601                                                                                                                   
Juneau, AK  99801-0601                                                                                                          
POSITION STATEMENT: Supported SB 125.                                                                                         
                                                                                                                                
Virginia Stonkus                                                                                                                
Certification and Licensing                                                                                                     
Division of Public Health                                                                                                       
Department of Health & Social Services                                                                                          
PO Box 110601                                                                                                                   
Juneau, AK  99801-0601                                                                                                          
POSITION STATEMENT: Supported SB 125.                                                                                         
                                                                                                                                
Stacie Kraly, Senior Assistant Attorney General                                                                                 
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, AK  99811-0300                                                                                                          
POSITION STATEMENT: Commented on SB 125.                                                                                      
                                                                                                                                
Margo McCabe, Chair                                                                                                             
Trustees for the Alaska Children's Trust                                                                                        
POSITION STATEMENT: Supported SB 150.                                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR FRED DYSON  called the Senate Health,  Education and Social                                                             
Services  Standing  Committee meeting  to  order  at 1:36:40  PM.                                                             
Present were  Senators Kim  Elton, Lyda  Green, Donny  Olson, and                                                               
Chair Fred Dyson.                                                                                                               
                                                                                                                                
1:37:00 PM                                                                                                                    
                                                                                                                                
          SB 125-LICENSING MEDICAL OR CARE FACILITIES                                                                       
                                                                                                                                
CHAIR DYSON announced SB 125 to be up for consideration.                                                                        
                                                                                                                                
DR. RICHARD MANDSAGER, Director,  Division of Public Health, said                                                               
SB  125   would  consolidate  licensing  background   checks  for                                                               
certifications by  the Department  of Health and  Social Services                                                               
(DHSS).                                                                                                                         
                                                                                                                                
1:41:51 PM                                                                                                                    
SENATOR  OLSON  asked whether  there  had  been complaints  or  a                                                               
problem with licensing some facilities.                                                                                         
                                                                                                                                
DR. MANDSAGER  answered that  there had  been no  complaints, but                                                               
the issue is that there is  a myriad of different rules governing                                                               
different care  providers. Assisted  living homes  and for-profit                                                               
hospices  have  most  of  their  rules  defined  in  statute  and                                                               
everything else  has most of  their rules defined  in regulation.                                                               
Since regulations are developed over  time, the rules for appeals                                                               
are all  a little different.  SB 125 simplifies  and standardizes                                                               
the processes.                                                                                                                  
                                                                                                                                
SENATOR OLSON asked  whether the burdens on  care providers would                                                               
be greater or lesser with the passage of the bill.                                                                              
                                                                                                                                
DR.  MANDSAGER replied  that care  providers  generally like  the                                                               
bill.                                                                                                                           
                                                                                                                                
SENATOR OLSON asked whether the  bill would put some entities out                                                               
of business.                                                                                                                    
                                                                                                                                
DR. MANDSAGER answered if the  entities are competent, they would                                                               
remain in  business. If  they end  up going  out of  business, it                                                               
would be for reasons other than this bill.                                                                                      
                                                                                                                                
1:45:50 PM                                                                                                                    
CHAIR  DYSON said  he heard  that due  to a  shortage of  doctors                                                               
licensed to perform abortions in  Alaska, doctors not licensed in                                                               
Alaska  were flying  in to  perform those  services. He  asked if                                                               
they were in compliance with  the abortion statute, AS 18.16.010,                                                               
that says:                                                                                                                      
                                                                                                                                
     Abortion may  not be performed unless  (1) the abortion                                                                    
     is  performed  by a  physician  licensed  by the  State                                                                    
     Medical Board;  or (2) the  abortion is performed  in a                                                                    
     hospital or a facility approved  for the purpose by the                                                                    
     Department of Health and Social Services.                                                                                  
                                                                                                                                
VIRGINIA  STONKUS,  Certification   and  Licensing,  Division  of                                                               
Public Health,  Department of Health and  Social Services (DHSS),                                                               
responded that  physicians are licensed  by the Board  of Medical                                                               
Examiners and  that the  division does  not license  the services                                                               
that  are provided  in  hospitals. The  decisions  about what  is                                                               
performed or available in the  institutions are determined by its                                                               
Board of Governors.                                                                                                             
                                                                                                                                
1:48:01 PM                                                                                                                    
CHAIR DYSON noted that abortions  performed outside of a hospital                                                               
is the issue.                                                                                                                   
                                                                                                                                
MS.  STONKUS   replied  that  the   division  does   not  license                                                               
individual physicians or individual physician clinics.                                                                          
                                                                                                                                
DR.  MANDSAGER  said  he  didn't think  the  Board  licensed  for                                                               
abortion  specifically, but  he  would have  to research  whether                                                               
doctors are asked what procedures they perform.                                                                                 
                                                                                                                                
CHAIR DYSON said  he has raised the issue numerous  times and has                                                               
never been  satisfied that the  DHSS is in compliance  with state                                                               
law. He asked if it was  true that doctors not licensed in Alaska                                                               
were flying up here to practice and who would investigate that.                                                                 
                                                                                                                                
MR. MANDSAGER  replied that that  issue would be  investigated by                                                               
the Board of Medical Examiners.                                                                                                 
                                                                                                                                
CHAIR DYSON  asked whether their investigation  would happen only                                                               
because of a complaint rather than  just being asked by him to do                                                               
it.                                                                                                                             
                                                                                                                                
DR. MANDSAGER responded that the board responds to complaints.                                                                  
                                                                                                                                
MS. STONKUS added  that SB 125 was intended to  provide a minimal                                                               
framework, which would  allow the agency to work  with the number                                                               
of different  of programs that  would be subject to  licensure so                                                               
that facilities  and programs are  not accidentally  excluded. An                                                               
example  is that  they need  to accommodate  children differently                                                               
than adults.                                                                                                                    
                                                                                                                                
CHAIR  DYSON asked  if any  of  the waivers  or exceptions  would                                                               
threaten the health of the patients.                                                                                            
                                                                                                                                
MS. STONKUS replied no, accommodations would have to be made.                                                                   
                                                                                                                                
1:50:36 PM                                                                                                                    
CHAIR  DYSON asked  whether  he  could assume  that  none of  the                                                               
waivers  or  exceptions  would  affect  the  health  of  patients                                                               
undergoing care.                                                                                                                
                                                                                                                                
MS. STONKUS replied that was correct.                                                                                           
                                                                                                                                
1:52:17 PM                                                                                                                    
CHAIR  DYSON asked  why the  criminal  background check  includes                                                               
both charges and convictions.                                                                                                   
                                                                                                                                
DR. MANDSAGER  replied that including the  language "charged with                                                               
a crime" has been discussed internally  for a while and the issue                                                               
is when  someone is charged with  a crime, often they  will leave                                                               
employment; it might  not get prosecuted and it  vanishes. In the                                                               
interest of  trying to a get  full picture of an  individual, the                                                               
bill  includes  "charged with  a  crime"  so the  department  can                                                               
determine  whether  it should  consider  barring  a suspect  from                                                               
employment. It  doesn't necessary mean  that they will  be barred                                                               
from  employment if  they  were  charged, but  it  might in  some                                                               
cases.                                                                                                                          
                                                                                                                                
CHAIR DYSON asked who would have access to that information.                                                                    
                                                                                                                                
1:53:58 PM                                                                                                                    
STACIE KRALY,  Senior Assistant  Attorney General,  Department of                                                               
Law  (DOL),   said  that  criminal  information   is  all  public                                                               
information  if someone  is an  adult although  juveniles have  a                                                               
different standard.  However, the premise for  information on the                                                               
civil registry is  that it would be restricted  to the department                                                               
and individuals who need it  to determine whether it is pertinent                                                               
to the  application and  should be entered  onto the  civil abuse                                                               
registry. The  department is still  fleshing out the  due process                                                               
mechanism  that would  be available  to  people on  the list  for                                                               
cases of a vindictive employer.                                                                                                 
                                                                                                                                
1:56:51 PM                                                                                                                    
CHAIR  DYSON asked  if an  applicant would  be informed  that the                                                               
results of  a background check  could be  public and placed  on a                                                               
registry.                                                                                                                       
                                                                                                                                
MS. KRALY  replied that the  results of the check  would probably                                                               
not  be on  the registry,  but the  information they  relied upon                                                               
would  be in  a repository.  Applicants would  be told  about the                                                               
background   check  process   and   the   possibility  that   the                                                               
information could be placed on a public registry.                                                                               
                                                                                                                                
CHAIR DYSON  said for the record  that it is his  contention that                                                               
it must be  clear to an applicant that such  information could be                                                               
placed on a public registry.                                                                                                    
                                                                                                                                
1:59:31 PM                                                                                                                    
CHAIR DYSON noted that people  in custody and divorce proceedings                                                               
sometimes  file  abuse  and  other  charges  that  are  sometimes                                                               
motivated by spite and asked how those would be considered.                                                                     
                                                                                                                                
MS. KRALY  replied that the  department wants to  give applicants                                                               
the ability to include information  that may affect an employer's                                                               
perception  of  culpability  in  a  given  circumstance  such  as                                                               
divorce proceedings.                                                                                                            
                                                                                                                                
CHAIR  DYSON  asked  if  criminal information  would  be  on  the                                                               
registry.                                                                                                                       
                                                                                                                                
MS.   KRALY  replied   that  criminal   information  is   already                                                               
accessible  to  the public,  but  the  board  will have  to  make                                                               
decisions   about  an   applicant   being   terminated  when   no                                                               
adjudicatory  act  took  place   and  that  information  is  more                                                               
difficult  to  get  because  it  is  not  necessarily  on  record                                                               
anywhere.                                                                                                                       
                                                                                                                                
2:03:44 PM                                                                                                                    
CHAIR DYSON remarked that there  are lots of spurious cases these                                                               
days  against  medical  professionals  and  consequently  medical                                                               
costs are getting  so expensive that many prefer  to settle suits                                                               
and the decision is never made whether they are guilty or not.                                                                  
                                                                                                                                
DR. MANDSAGER responded that the  civil registry language on page                                                               
28,  line  5,  is  limited  to "the  applicant  or  the  employee                                                               
committed   abuse,   neglect   or  exploitation   under   certain                                                               
statutes." It's  limited to  things that  are pertinent  to these                                                               
kinds of facilities.                                                                                                            
                                                                                                                                
2:05:21 PM                                                                                                                    
SENATOR ELTON  said his  concern was that  the registry  could be                                                               
used by an employer to force an employee to leave.                                                                              
                                                                                                                                
     The  hammer would  be if  you  don't do  it, your  name                                                                    
     could end  up on the  abuse registry, but, if  in fact,                                                                    
     abuse happened,  instead of going through  a protracted                                                                    
     personnel kind  of battle, this person  might decide to                                                                    
     leave and go to work someplace else.                                                                                       
                                                                                                                                
DR.  MANDSAGER replied  that cases  needed to  be captured  where                                                               
people leave employment  before they are reported  to the police.                                                               
The  question is  how  to  get that  information.  He would  like                                                               
regulations requiring  employers to  report to the  department if                                                               
someone leaves in lieu of  getting reported to the police because                                                               
of some abusive act they had committed.                                                                                         
                                                                                                                                
2:07:11 PM                                                                                                                    
MS. KRALY  added that  he thought  that Dr.  Mandsager's response                                                               
was carefully crafted.  They want to encourage  employers to make                                                               
good decisions about bad employees.                                                                                             
                                                                                                                                
SENATOR ELTON commented  that it is not unknown  for employers to                                                               
threaten their employees.                                                                                                       
                                                                                                                                
DR.  MANDSAGER said  that he  would take  the Senator's  comments                                                               
under advice.                                                                                                                   
                                                                                                                                
2:09:45 PM                                                                                                                    
CHAIR  DYSON asked  DR. MANDSAGER  if he  read ASHNHA's  position                                                               
paper. His  first question is  why anyone  would file on  time if                                                               
there weren't a penalty for not doing so.                                                                                       
                                                                                                                                
DR. MANDSAGER  replied yes, he  had read the paper.  With respect                                                               
to  the concern  about  timely  filing, the  intent  is that  the                                                               
department receives  an application,  but if  it doesn't  get its                                                               
work done on time, the entity remains licensed until it does.                                                                   
                                                                                                                                
CHAIR DYSON asked if his amendments fix that.                                                                                   
                                                                                                                                
DR. MANDSAGER  replied that he  thought the statute  already said                                                               
that, but  the lawyers  didn't. Another  amendment says  that the                                                               
commissioner would  have to authorize  the closure of  a facility                                                               
and accommodations  would have  to be made  for its  residents or                                                               
patients.                                                                                                                       
                                                                                                                                
2:12:52 PM                                                                                                                    
MS. KRALY  said the ASHNHA  letter said  the state should  not be                                                               
immune from compensating for  economic consequences of department                                                               
actions ultimately found to be  excessive in the courts. She said                                                               
the immunity  language on page 13  was drafted using the  best of                                                               
the  13 or  14 statutory  frameworks for  licensure. It  does not                                                               
expand  nor diminish  the  immunities under  current  law.   With                                                               
respect  to  ASHNHA's  comments,   there  is  currently  no  such                                                               
immunity  for  things  like  that  and  no  statutes  that  would                                                               
preclude the possibility of recovery.                                                                                           
                                                                                                                                
2:15:20 PM                                                                                                                    
DR.  MANDSAGER  said that  the  current  definition of  'assisted                                                               
living  home'  resulted from  issues  emerging  from the  overlap                                                               
between  assisted  living  services   and  medical  services.  He                                                               
disagreed that  this overlap was  problematic and felt that  if a                                                               
family  and a  doctor decide  that an  elder should  have medical                                                               
care in an  assisted living home and is willing  to be liable for                                                               
that decision, they should have a right to do so.                                                                               
                                                                                                                                
2:18:03 PM                                                                                                                    
CHAIR DYSON  asked if a federal  law precludes a person  being in                                                               
possession  of  a firearm  on  the  parking  lot of  a  federally                                                               
licensed childcare center.                                                                                                      
                                                                                                                                
MS. STONKUS replied no.                                                                                                         
                                                                                                                                
2:20:04 PM                                                                                                                    
SENATOR GREEN remarked that this seems  to be an expansion of the                                                               
prohibition of previous language  regarding firearms in federally                                                               
licensed  childcare centers  and she  wanted assurance  that this                                                               
bill does  not create a  further expansion of  the aforementioned                                                               
prohibition.                                                                                                                    
                                                                                                                                
2:21:46 PM                                                                                                                    
DR. MANDSAGER  asked if  she thought it  would be  appropriate to                                                               
test this language.                                                                                                             
                                                                                                                                
SENATOR  GREEN   responded  that   she  thought  that   would  be                                                               
appropriate.                                                                                                                    
                                                                                                                                
MS.  KRALY said  that  she would  take  Senator Green's  concerns                                                               
under advisement,  but emphasized  that the department  had taken                                                               
special care not to create an expansion.                                                                                        
                                                                                                                                
CHAIR DYSON  said he could not  support this bill if  any Alaskan                                                               
who stops  to pick up  his child or visit  a parent in  a nursing                                                               
home  on the  way to  or from  a hunting  trip with  a weapon  is                                                               
guilty. That  included people who  had been assaulted  or someone                                                               
who delivered someone who had just been injured to a hospital.                                                                  
                                                                                                                                
2:24:25 PM                                                                                                                    
SENATOR ELTON  said that an  abuse registry creates the  kinds of                                                               
actions  that could  be  heard by  the  Office of  Administrative                                                               
Hearings and  therefore assumed  there would  be a  fiscal impact                                                               
and a fiscal note.                                                                                                              
                                                                                                                                
MS.  KRALY   responded  that  the   due  process   mechanism  for                                                               
determining  placement on  the civil  registry had  not yet  been                                                               
developed, so a fiscal note couldn't be determined.                                                                             
                                                                                                                                
SENATOR ELTON  asked how "volunteer  of an entity" is  defined on                                                               
page 26. He used dog handlers for an example.                                                                                   
                                                                                                                                
DR.  MANDSAGER replied  that "volunteer"  is not  defined in  the                                                               
statute at  this point, but  the larger facilities have  lists of                                                               
volunteers with  special training  and a small  organization like                                                               
an assisted living home doesn't  have volunteer lists and that is                                                               
a good question.                                                                                                                
                                                                                                                                
He said  he had  prepared two  sets of  amendments and  had hoped                                                               
that a  CS version  would have already  incorporated them  - most                                                               
are conforming  amendments. He said  that conceptual  Amendment 1                                                               
was  written  primarily because  the  initial  draft of  the  law                                                               
interpreted a starting  date that won't happen.  So, it renumbers                                                               
everything to  allow for  a starting date  after this  bill would                                                               
pass.                                                                                                                           
                                                                                                                                
2:29:40 PM                                                                                                                    
SENATOR  GREEN moved  to adopt  conceptual Amendment  1 and  then                                                               
objected for discussion purposes.                                                                                               
                                                                                                                                
                     CONCEPTUAL AMENDMENT 1                                                                                     
     1) Amend section 47.32.900(1)(B)  [page 15, line  24] -                                                                    
     before "services" insert  "or other invasive diagnostic                                                                    
     or   therapeutic".   (This   would  have   allowed  the                                                                    
     department  to  license  medical centers  that  conduct                                                                    
     procedures that  are intrusive and pose  increased risk                                                                    
     to the patient, such as cardiac catheterization.)                                                                          
                                                                                                                                
     2)  Add a  new Section  47 -  "Section 17  of this  Act                                                                    
     takes   effect  upon   the   effective   date  of   the                                                                    
     implementing regulations,  or March 1,  2006, whichever                                                                    
     occurs sooner."                                                                                                            
                                                                                                                                
MS. STONKUS  explained that  the whole  concept was  to implement                                                               
the  bill as  of  July 1,  2005 and  then  further construct  the                                                               
registry  and  the background  check  piece.  That timeframe  was                                                               
ambitious  and  changing  that   date  required  eight  pages  of                                                               
conforming  language. The  March date  was set  because of  their                                                               
federal grant timeframe.                                                                                                        
                                                                                                                                
DR.  MANDSAGER explained  that  the second  part  of Amendment  1                                                               
allows  flexibility in  statute  to  accommodate improvements  in                                                               
technology  that may  allow certain  procedures  to be  performed                                                               
outside of a hospital.                                                                                                          
                                                                                                                                
SENATOR GREEN asked for an example of a therapeutic service.                                                                    
                                                                                                                                
DR. MANDSAGER replied a linear  accelerator for radiation therapy                                                               
or  chemotherapy.   In  Alaska,  those  things   exist  within  a                                                               
hospital, a  licensed entity.  In other  states, they  have moved                                                               
outside the hospital.                                                                                                           
                                                                                                                                
2:35:20 PM                                                                                                                    
CHAIR DYSON asked if invasive diagnostic is considered imaging.                                                                 
                                                                                                                                
DR. MANDSAGER  replied that  it could be  imaging, but  he didn't                                                               
know if those words were exactly right yet.                                                                                     
                                                                                                                                
CHAIR DYSON asked him if barium was invasive.                                                                                   
                                                                                                                                
DR.  MANDSAGER replied  no and  that's why  he was  not currently                                                               
satisfied with  the language of  the Amendment 1. He  didn't want                                                               
to get into doctor's offices or ordinary X-ray units.                                                                           
                                                                                                                                
CHAIR DYSON  announced that he  would hold action on  Amendment 1                                                               
pending modifications by the sponsor.                                                                                           
                                                                                                                                
SENATOR ELTON moved to adopt conceptual Amendment 2.                                                                            
                                                                                                                                
CHAIR DYSON objected for the purpose of discussion.                                                                             
                                                                                                                                
DR.  MANDSAGER explained  that Amendment  2 adds  a new  section,                                                               
(e),  that  requires  the  commissioner to  be  involved  if  the                                                               
department  has  to take  over  a  facility. Everything  else  is                                                               
renumbering.  The other  part corrects  a drafting  error on  the                                                               
bottom of page 13, line 1.                                                                                                      
                                                                                                                                
2:38:54 PM                                                                                                                    
CHAIR  DYSON thanked  everyone  for their  comments  and said  he                                                               
would hold the bill in committee.                                                                                               
           SB 150-ALASKA CHILDREN'S TRUST FUND GRANTS                                                                       
                                                                                                                                
CHAIR DYSON announced SB 150 to be up for consideration.                                                                        
                                                                                                                                
MARGO  McCABE,  Chairman,  Trustees  for  the  Alaska  Children's                                                               
Trust, related that  the Trust was created by  the Legislature in                                                               
1988 to help  fund programs across the state  aimed at preventing                                                               
child abuse and neglect. She said:                                                                                              
                                                                                                                                
     Under current law,  the Trust may spend  the net income                                                                    
     earned  by  the  trust  on  community-based  prevention                                                                    
     programs. Last year  it awarded a total  of $217,000 in                                                                    
     grants  to  16   non-profit  organizations  across  the                                                                    
     state.  Current statute  limits the  size of  grants to                                                                    
     $50,000  and provides  a specific  funding formula  for                                                                    
     funding  grants. SB  150 removes  the  $50,000 cap  and                                                                    
     calls for the elimination of the funding formula.                                                                          
                                                                                                                                
     The Alaska  Children's Trust  is seeking  these changes                                                                    
     for  a  couple  of  reasons.  The  changes  would  give                                                                    
     trustees the  possibility to  set maximum  grant awards                                                                    
     and  funding  formulas  based on  need  rather  than  a                                                                    
     predetermined amount set in statute.  The intent is not                                                                    
     to eliminate  caps of funding formulas  completely, but                                                                    
     rather  the trust  would outline  maximum grant  awards                                                                    
     and  funding formulas  with the  issuance  of each  new                                                                    
     RFP.  More  importantly,  the changes  will  allow  the                                                                    
     trust to be better  positioned to receive larger grants                                                                    
     from private  foundations and charitable  trusts. Large                                                                    
     grants  could  then  be more  easily  redistributed  to                                                                    
     [indisc.] programs  around the  state. In  closing, the                                                                    
     rate of child  abuse and neglect in  this state remains                                                                    
     higher in Alaska than anywhere else in the nation...                                                                       
                                                                                                                                
She said the Alaska Children's  Trust will continue to fund small                                                               
community  grants, but  would like  the  opportunity to  consider                                                               
larger projects that may truly "move the needle."                                                                               
                                                                                                                                
2:42:06 PM                                                                                                                    
CHAIR  DYSON said  that he  thought that  the Alaskan  Children's                                                               
Trust  was initially  established to  fund small  community based                                                               
programs to  enable organizations  that were serving  children to                                                               
get going  and establish themselves  and establish  other funding                                                               
streams.                                                                                                                        
                                                                                                                                
MS.  McCABE responded  that  is  true and  they  still have  that                                                               
vision, but would like to be able to receive larger grants.                                                                     
                                                                                                                                
CHAIR DYSON asked  if she intended to become  a perennial funding                                                               
stream  for   some  organizations  that  can't   get  alternative                                                               
funding.                                                                                                                        
                                                                                                                                
MS. McCABE replied  no, that there would still  be funding limits                                                               
and a  rule that recipients  would be self-sustaining  after four                                                               
years. Each new RFP would have that requirement. She explained:                                                                 
                                                                                                                                
     Last  year  legislation  proposed  75  percent  of  the                                                                    
     program's  total  funding in  the  first  year; in  the                                                                    
     second  year 50  percent and  in the  third and  fourth                                                                    
     final year, 25  percent. I think the  Board of Trustees                                                                    
     still   likes  those   numbers  and   if  it   has  the                                                                    
     flexibility  if  this  statute was  removed,  it  would                                                                    
     implement that language in its RFP.                                                                                        
                                                                                                                                
CHAIR DYSON  asked if she is  trying to delete all  the statutory                                                               
limitations  on  the length  of  funding  and trust  the  board's                                                               
judgment to  carry forward  the general  gist of  the legislative                                                               
intent.                                                                                                                         
                                                                                                                                
2:46:47 PM                                                                                                                    
CHAIR  DYSON  asked  if  her organization  wants  to  follow  the                                                               
legislative  intent   of  last  year's  bill,   but  without  the                                                               
oversight of the Legislature.                                                                                                   
                                                                                                                                
MS.  McCABE replied,  "Absolutely....  I think  that  is what  we                                                               
would  be doing."  She said  the board  unanimously supports  the                                                               
legislation as it  is drafted today. She said they  are trying to                                                               
have  more  flexibility  in  being   able  to  implement  funding                                                               
formulas that are more appropriate to perform their mission.                                                                    
                                                                                                                                
2:49:10 PM                                                                                                                    
CHAIR  DYSON  asked  if  this bill  removes  the  restriction  on                                                               
spending the earnings of the trust.                                                                                             
                                                                                                                                
MS. McCABE  replied that  the language  just removes  the $50,000                                                               
cap and the funding formula.                                                                                                    
                                                                                                                                
CHAIR DYSON commented that he  thought she answered yes. He asked                                                               
if she has donors who don't  want to contribute to the principle,                                                               
but want their donation to  flow through directly to a particular                                                               
organization.                                                                                                                   
                                                                                                                                
MS. McCABE acknowledged that was correct.                                                                                       
                                                                                                                                
SENATOR  GREEN asked  why the  donor  could not  just give  their                                                               
donation directly  to their favorite  organization as  opposed to                                                               
funneling it through the Children's Trust.                                                                                      
                                                                                                                                
MS. MCCABE replied  that a number of larger trusts  exist that do                                                               
larger grants -  in the $1 million to $2  million range. It might                                                               
be hard to  find some of the smaller non-profits  that would like                                                               
some  of those  monies and  it  would also  be easier  to find  a                                                               
number  of grantees  at  once  that would  benefit  from a  large                                                               
grant.                                                                                                                          
                                                                                                                                
CHAIR  DYSON   asked  if  all   of  her  grants   are  non-profit                                                               
organizations.                                                                                                                  
                                                                                                                                
MS.  McCABE replied  that they  are all  non-profit organizations                                                               
that would qualify  as a charitable gift  recipient under federal                                                               
tax law.                                                                                                                        
                                                                                                                                
SENATOR GREEN  said that this  bill seems to defeat  the original                                                               
intent of the Children's Trust,  which was to amass donations and                                                               
live  off  that endowment  and  it  would become  less  effective                                                               
without contributions  to the endowment. She  remembered creating                                                               
the limitation  to prevent a  single organization  from receiving                                                               
an inappropriate proportion of the trust's fund.                                                                                
                                                                                                                                
MS. McCABE  responded that the  trust is committed  to increasing                                                               
principle,  but   it  receives  grants  that   prohibit  it  from                                                               
increasing  its principle  and she  wants to  be able  to receive                                                               
those  grants. The  rate of  child abandonment  in this  state is                                                               
unbearably high and she wants to do as much as she can.                                                                         
                                                                                                                                
2:54:45 PM                                                                                                                    
CHAIR DYSON  thanked everyone for  their testimony and  said that                                                               
SB 150 would be held in committee.                                                                                              
                                                                                                                                
There being  no further  business to  come before  the committee,                                                               
Chair Dyson adjourned the meeting at 2:55:58 PM.                                                                              
                                                                                                                                
                                                                                                                                

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