Legislature(1995 - 1996)
03/20/1995 09:11 AM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE March 20, 1995 9:11 a.m. MEMBERS PRESENT Senator Lyda Green, Chairman Senator Loren Leman, Vice-Chairman Senator Mike Miller Senator Johnny Ellis Senator Judy Salo MEMBERS ABSENT All members present. COMMITTEE CALENDAR SENATE BILL NO. 105 "An Act relating to a requirement that a parent, guardian, or custodian consent before a minor receives an abortion; establishing a judicial bypass procedure by which a minor may petition a court for authorization to consent to an abortion without consent of a parent, guardian, or custodian; amending the definition of `abortion'; and amending Alaska Rules of Civil Procedure 40, 53, and 79; Alaska Rules of Appellate Procedure 204, 210, 212, 213, 508, and 512.5; and Alaska Administrative Rule 9." SENATE BILL NO. 117 "An Act establishing a statewide independent living council and clarifying its relationship with existing agencies; and providing for an effective date." SENATE BILL NO. 123 "An Act relating to student loan programs, interstate compacts for postsecondary education, and fees for review of postsecondary education institutions; and providing for an effective date." PREVIOUS SENATE COMMITTEE ACTION No previous action to record. WITNESS REGISTER Senator Leman State Capitol Juneau, Alaska 99801-1182 POSITION STATEMENT: Prime sponsor of SB 105. Brant McGee Public Advocacy 900 W 5th Avenue #525 Anchorage, Alaska 99501 POSITION STATEMENT: Discussed the appointment of the guardian at litem. Judith Kohler Americans United for Life Chicago, IL POSITION STATEMENT: Discussed the importance of parental involvement statutes. Chris Christensen, Staff Counsel Alaska Court System 303 K Street Anchorage, Alaska 99501-2084 POSITION STATEMENT: Discussed SB 105. Art Mathias, President Christian Coalition PO Box 741564 Anchorage, Alaska 99504 POSITION STATEMENT: Indicated the need for parental involvement. Barbara Fallon POSITION STATEMENT: Pointed out the inconsistency of parental involvement legislation. Pauline Hillter, Chair Abortion Rights PO Box 240667 Anchorage, Alaska 99511 POSITION STATEMENT: Stated opposition to SB 105 for Abortion Rights. Virginia Phillips, Spokesman Right to Life for American Indians & Alaskan Natives 404 Lake Street 2-D Sitka, Alaska 99835 POSITION STATEMENT: Supported SB 105 and urged its speedy passage. Martha Devereaux 1511 Edgecombe Drive Sitka, Alaska 99835 POSITION STATEMENT: Urged the speedy passage of SB 105. Sharon Waisanen 35985 Pioneer Drive Soldotna, Alaska 99669 POSITION STATEMENT: Opposed SB 105. Gene Ottenstroer PO Box 1059 Delta Junction, Alaska 99737 POSITION STATEMENT: Opposed SB 105. Eileen Becker, Assistant Director Homer Crisis Pregnancy Center PO Box 2 Homer, Alaska 99603 POSITION STATEMENT: Supported SB 105. Lisa Penalver, President Fairbanks Coalition for Choice 1166 Skyline Drive Fairbanks, Alaska 99712 POSITION STATEMENT: Opposed SB 105. Kelli Mahoney Mat-Su POSITION STATEMENT: Concurred with Ms. Penalver and recommended funding model pregnancy prevention programs. Stan Ridgeway, Deputy Director Department of Education 801 W 10th Street Juneau, Alaska POSITION STATEMENT: Reviewed SB 117. Joe McCormick, Executive Director Alaska Commission on Postsecondary Education Department of Education 3030 Vintage Boulevard Juneau, Alaska 99801-7109 POSITION STATEMENT: Reviewed SB 123. Jerry Shriner, Special Assistant Department of Corrections 240 Main Street, Suite 700 Juneau, Alaska POSITION STATEMENT: Explained the Department of Corrections' amendment. ACTION NARRATIVE TAPE 95-17, SIDE A SHES - 3/20/95 SB 105 PARENTAL CONSENT BEFORE MINOR'S ABORTION Number 003 VICE-CHAIRMAN LEMAN called the Senate Health, Education and Social Services (HESS) Committee to order at 9:11 a.m. He explained that Chairman Green would be arriving later due to a cancelled flight. He noted that other members would arrive shortly and he would chair the meeting until Senator Green arrived. He introduced SB 105 as the first order of business before the committee. Vice-Chairman Leman relinquished control of the chair to Senator Miller in order to deliver his sponsor statement. SENATOR LEMAN, prime sponsor of SB 105, explained that SB 105 provides for a judicial by-pass for parental consent requirements for a minor's abortion. The objective of this is to make the existing parental consent requirement in state law enforceable. Currently, the state does not enforce the parental consent requirement; the attorney generals specified that the Alaska Statute is not constitutional. The statute does not have an alternative procedure, judicial by-pass. He clarified that judicial by-pass would allow a juvenile girl to go to court to request that she be allowed to give consent for an abortion instead of her parents. SB 105 would provide that alternative procedure which would make it consistent with other state's whose similar laws have been upheld as constitutional by the Supreme Court. Senator Leman stated that SB 105 would help young pregnant women seek guidance for one of the most important decisions they may make. He pointed out that procedures such as ear piercing and receiving medication in a school clinic require parental consent or permission for minors. He explained that personally, he did not want judicial by-pass because it would provide a large loophole. However, SB 105 would reduce the number of abortions while ensuring parental involvement. Number 105 Senator Leman pointed out that 22 states now enforce some form of parental involvement legislation which has reduced teenage abortions by up to 27 percent. Applying the typical factors to Alaska, approximately 100 children's lives could be saved every year with the passage of SB 105. He informed everyone that recent polls illustrate that 74 to 80 percent of the population would support the parental right to be involved in the abortion decisions of minor women. He acknowledged that SB 105 would not cure all the devastation caused by abortion, but the legislation would help. Senator Leman reiterated that Alaska statutes provide for parental involvement in many other areas and abortion should be consistent with those. Regarding the constitutionality of such legislation in Alaska, Senator Leman noted that children and adults are viewed differently in the law and the courts. He explained that while the Constitution of Alaska protects children, it also presumes that children are not at the same level of maturity as adults. The law acknowledges the difference between children and adults in the following three areas: (1) there is a peculiar vulnerability of children, (2) there is an inability of children to make decisions in an informed mature manner, and (3) there is an importance placed on the parental role of child rearing. SB 105 attempts to encourage parental involvement while allowing a streamlined alternative procedure for those who wish to go to court. Number 167 SENATOR MILLER returned the Chair to Senator Leman. SENATOR LEMAN began calling those who wished to testify. BRANT MCGEE, Head of the Office of Public Advocacy (OPA), explained that they were interested in this bill because the judicial by-pass requires the appointment of a guardian at litem. Guardian at litems are provided by OPA. He stated that approximately 2,400 abortions are performed in Alaska of which 288 are performed on women age 17 or younger. He estimated that 39 percent, 112 young women, would pursue judicial by-pass. That estimation is based on a study that said that of those states without parental consent or notice 61 percent of parents were informed of their children's abortion. Mr. McGee noted that states with judicial by-pass should have a record which would project what would happen in these proceedings. In Pennsylvania, which enacted such legislation last March, approximately 100 percent of minors' abortions are approved by the court. Massachusetts has data dating back to April of 1981 when the parental consent law came into effect; 1/10th of one percent, 14, of the abortions were denied. Of those 14 denials, 12 were overturned by an appellate court and the remaining two became moot. He informed the committee that a Minnesota judge characterized his participation in more than 1,000 parental notification hearings as a routine clerical function. This evidence illustrates that black middle-aged judges would be unlikely to deny teenage women seeking judicial by-pass for an abortion. He indicated that the clauses in those states had been condemned for delaying teenagers' abortions as well as a judiciary waste of time and money. However, the Pennsylvania Pro Life group does feel that parental consent laws discourage minors from having abortions. Number 229 Mr. McGee pointed out that page 5, line 16, subsection (d) of SB 105 seems to confuse the functions of a guardian at litem and an attorney which are both appointed; one person cannot serve in both capacities. A guardian at litem must protect the best interest of the child while an attorney must represent the wishes of their client. He did not feel that the appointment of a guardian at litem would be appropriate since the best interest of the child would not be relevant to the judicial criteria in making the decision. He suggested that mandating the appointment of an attorney to represent the client would seem more appropriate. SENATOR SALO expressed concern about the time needed to appoint a guardian at litem and obtaining an attorney, especially with the upcoming funding cuts. BRANT MCGEE said that a guardian at litem and an attorney are appointed overnight. The resulting problem would be that the person or attorney must be available to devote their full time to the preparation for the hearing. Mr. McGee noted that the office could not afford to absorb this responsibility into their current caseload. They cannot pay for their current caseload. SENATOR SALO inquired as to the fiscal note of SB 105. SENATOR LEMAN informed her that the fiscal note from the Office of Public Advocacy was $112,000 per year. SENATOR MILLER asked Mr. McGee how he arrived at his numbers when little if any reporting of abortions occur. BRANT MCGEE explained that he had received articles from a friend in Denver from which he had derived this information. He cited the article "Parental Involvement and Minors' Abortions Decisions" published in Family Planning Perspectives in the fall of 1992 which discussed the numbers of minors seeking abortions, the reasons they seek abortions, and the reasons they may not desire parental involvement. The other data can be found in the Family Planning Perspectives and a book entitled, Abortions and Women's Health which was published in 1990. Number 298 SENATOR MILLER inquired as to how Mr. McGee arrived at the numbers for Alaska regarding the number of abortions in Alaska and the relating percentages. BRANT MCGEE specified that the number of abortions in Alaska referred to reported abortions. Mr. McGee commented that he did not have data for 1993 and 1994. The number of women 17 or younger is derived from statistic reports. Mr. McGee clarified that the 39 percent of young women that he projects would seek judicial by-pass for an abortion is derived from another study. The other study illustrated that in states without parental consent or notification 61 percent of parents were informed of their children's abortion. Mr. McGee assumed that the remaining 39 percent who do not currently inform their parents would seek a judicial by-pass. The final number is an assumption based on hard data. SENATOR LEMAN asked why Mr. McGee assumed that all 39 percent of those minors would go to court rather than a portion of that group going to their parents due to SB 105. BRANT MCGEE clarified that the numbers are based on the number of children who currently do not go to their parents. The assumption is that if they do not inform their parents now and another alternative is provided, they would choose the alternative. Mr. McGee agreed that some would decide to talk to their parents, but that would depend upon many factors such as the availability of information regarding judicial by-pass. SENATOR LEMAN encouraged Mr. McGee to provide his testimony in writing and offer any other information he can. Number 339 JUDITH KOHLER, Americans United for Life testifying from Chicago, explained that the United States' Supreme Court had stated many good reasons to enact parental involvement statutes. Enacting such legislation would be in the best interest of Alaska in protecting the health and welfare of its minors, fostering family unity, and encouraging parental involvement in the upbringing of minor children. SB 105 has been drafted in order to conform with the Supreme Court requirements set out in parental involvement statutes in other states. Parental involvement statutes are important because teenagers often have difficulty assessing long-term consequences of difficult decisions. She asserted that parental involvement is particularly poignant with regard to abortion decisions due to the fact that a parent often remains responsible for their child for many years after an abortion. Alaska already has 22 parental consent or notification statutes. Ms. Kohler stated that although, abortions are legal they are not always safe. The Alan Guttmacher Institute, the research arm for the Pro Choice movement, reported that Alaska had 2,370 abortions in 1992 of which a third may be minors. Minors are in danger of experiencing medical complications; they have a 10 percent chance of experiencing immediate medical complications such as cervical injury, a perforated uterus and others. She surmised that since Alaska does not have an enforceable parental consent law, the parents of these minors receiving abortions were probably unaware of the possible dangers their children faced. Mr. Kohler said that Minnesota and Massachusetts have documented evidence that illustrates that the teenage pregnancy and abortion rate decreased after parental involvement statutes were enacted. There are currently 38 states which have parental involvement statutes, consent is required in 22 of the states while notice is required in 16 of the states. Number 392 SENATOR LEMAN asked if 38 states currently enforce parental involvement or is the number 22. JUDITH KOHLER clarified that 38 states have such statutes while some states are currently under litigation or they have become enjoined or declared unconstitutional. Ms. Kohler noted the chart from which this information is drawn. Ms. Kohler pointed out that the Pennsylvania statute provides much of the basis for SB 105. SENATOR LEMAN inquired as to where abortions involving minors without parental consent would typically be performed. JUDITH KOHLER stated that fewer and fewer abortions are done in hospitals. Perhaps, that is a result of the availability of abortion clinics which is where the majority of abortions are performed. SENATOR LEMAN asked if these clinics would have access to the juvenile's medical records. JUDITH KOHLER replied no and explained that only parents would have access to the minor's full medical record. Ms. Kohler felt that having a minor's full medical record for an abortion would lend support for the passage of parental involvement and consent legislation. In response to Senator Salo, Ms. Kohler stated that she was the Legislative Counsel for Americans United for Life. Ms. Kohler commented that she had dealt with this issue in a variety of ways due to her past experience as a former Illinois Legislator and prosecutor. Americans United for Life has been involved in every Supreme Court case that has been litigated since and including Roe vs. Wade. Americans United for Life is a law firm which deals with legislation, litigation, and public education. SENATOR LEMAN asked if Americans United for Life were involved in the numerous cases listed in the committee's back up. JUDITH KOHLER said yes and listed many of the cases in which the organization was involved. Ms. Kohler commented that this organization was the most experienced law firm in the nation in litigation defending statutes. Number 445 CHRIS CHRISTENSEN, General Counsel to the Judicial Branch, informed the committee that the Supreme Court does not take a position on legislation unless it would directly effect the internal administration of the Judicial Branch. Legislation such as SB 105 are policy calls which are constitutionally given to the legislature. He commented that page 5, lines 1-4 of SB 105 refer to a referee which the court system designates as a master, an attorney that is a specialist in a particular area. In Anchorage and Fairbanks where three quarters of the case volume is found, there are standing masters. He explained that the Supreme Court has always held that the power to appoint a master to give advice to a judge is an inherent power of a judge. The legislature cannot restrict that power even with a two-thirds vote. He expected that most of these cases in Anchorage would be referred to the Probate Master. The Probate Department is separate from the rest of the Superior Court; this department handles other judicial consent issues for juveniles. Mr. Christensen suggested that if OPA would be required to appoint guardians at litem and attorneys, then language to that effect should be specifically added on page 5, lines 16-21 to AS 44.21.410 which sets forth the jurisdiction of OPA. He apologized for not having the fiscal note prepared and explained that they were still determining the number of cases per year that there may be. He noted that Mr. McGee's fiscal note is only based on providing a guardian at litem. If an attorney is to be appointed also then the cost would probably more than double Mr. McGee's fiscal note. SENATOR LEMAN asked if the court system had any comments regarding the expedited procedure that SB 105 sets forth. CHRIS CHRISTENSEN noted that SB 105 would impose additional costs due to the expedited procedure. Mr. Christensen said that they recognize that if the legislation is approved then there would be no other alternative, but to follow this procedure. The Probate Department in Anchorage is already full through June. Mr. Christensen explained that with this legislation, they may have to leave additional time open in order to accommodate these cases which may in the long-term slow other areas of the court. Number 497 ART MATHIAS, President of the Christian Coalition of Alaska, stated that SB 105 is not about abortion, but rather parental rights and responsibilities. No matter ones personal opinion of abortion, parents have the right and the responsibility to be involved in the decisions of their minors. He reiterated that a physician is required to receive parental permission in order to treat a child's common cold or give a physical. Abortion does not require this parental consent although it is a serious medical procedure with serious side effects. He felt that the government would be contributing to the destruction of the family by not requiring parental consent for abortions of minors. He implied that teenagers were not mature enough to make life and death decisions such as abortion and be able to deal with the emotional trauma afterwards. Those who oppose SB 105 oppose the family. Abortion is a family decision. The rare case of pregnancy due to incest is addressed in SB 105 by allowing the judge to step in place of the family. He emphasized that as the family has deteriorated so has society; efforts to rebuild society and its families must be doubled. BARBARA FALLON, testifying on her own behalf, informed the committee that she had worked in a children's agency for five years with foster care and adoption and seven years as a director of a clinic in a general hospital. She mentioned the Right to Privacy when commenting on the inconsistency in regard to parental responsibility required in other areas dealing with minors. She emphasized that it seemed inconsistent that parents may not be informed when their minor child makes decisions about abortion or carrying a child to term. Number 554 PAULINE HILLTER, Chair of the Abortion Rights project, explained that the Abortion Rights project is dedicated to keeping abortion safe and legal for all women. Parental involvement cannot be legislated. The project is opposed to SB 105. VIRGINIA PHILLIPS, a mother and grandmother and great grandmother, stated support for SB 105 and for the physical and emotional health of minors. Minors do not have the necessary maturity for such a life changing decision as abortion. She reiterated the fact that minors are protected from their own immaturity in other areas and it seems logical to protect minors from making the decision to have an abortion by themselves. Some physicians need the restraint of the law making it illegal to perform an abortion on a minor without parental consent just as merchants are restrained with laws regarding selling alcohol and tobacco to minors. Ms. Phillips pointed out that parents and guardians are the only persons with complete medical and emotional facts concerning the minor, the minor may not even know all the facts. This information is necessary for a physician to make an informed decision regarding a minor's abortion. Parents should monitor the effects after an abortion and be able to help the minor with unforeseen medical and emotional problems. She noted that since the parents would be responsible for any medical costs after the abortion, it would only seem fair that they be included in the decision-making process. She indicated that the family unit could be strengthened by working through an unplanned pregnancy as a family. She had experienced this with her eldest daughter. TAPE 95-17, SIDE B Ms. Phillips reiterated the statistics in Pennsylvania which indicate that teenage births and abortions have decreased since parental involvement legislation was enacted. She urged the committee to pass SB 105 in its entirety as soon as possible. She noted that she was a Right to Life spokesman for American Indians and Alaskan Natives. Number 580 MARTHA DEVEREAUX, testifying in Sitka, hoped that SB 105 would receive a speedy passage. She suggested that legislation be introduced which would pursue a 24 hour waiting period and information on fetal development given to women. Parental notification in the case of minors receiving abortions is about who is responsible children. Parents are responsible for the welfare, provision and safety of their children. She reiterated the inconsistencies with parental consent and notification; abortion is a serious operation with many known side effects although parental consent or notification is not legally required. She listed many of the known side effects and dangers of abortions according to the National Abortion Federation. Ms. Devereaux cited a New York Times, CBS poll that illustrated that 76 percent of Americans support parental notification laws with only 21 percent in opposition to such laws. She discussed the passage of the 1991 Minnesota parental notification law which resulted in the decrease of teen pregnancy by 20 percent and abortions by 27 percent. Minnesota discovered that parental involvement works to reduce both the teen pregnancy rate and abortion. She informed the committee that Planned Parenthood's research division estimated that more than 90 percent of women who have abortions experience some form of physical or emotional trauma; 73 percent label the trauma as severe. Women who were asked if they would have chosen an abortion knowing where their lives were today, 94 percent said no. Ms. Devereaux recounted the 1990 case in Indiana in which a daughter's life could have been saved if the parents had known about her abortion. She asserted that parents are ultimately responsible for deciding the welfare of their children. Number 545 SHARON WAISANEN, testifying from Kenai Soldotna, opposed SB 105. SB 105 does nothing to prevent pregnancy. She informed everyone that in her experience in professionally working with young women, a great many of them seeking abortions do talk to their parents. Those who do not talk to their parents have a reason for not talking with their parents, furthermore, these women would not be likely to pursue the judicial by-pass option. She said that many children are victims of their parents. Ms. Waisanen discussed the Montana situation in which there is a proposal to require that one parent be notified 14 hours before their child had an abortion. She reviewed various other states parental involvement legislation. She indicated that not all parents would deal with a pregnant daughter in a loving and caring manner which could lead to the psychological and/or physical injury of the daughter. She noted that she had been a high school counselor and had worked with many young women in this situation. GENE OTTENSTROER, testifying from Delta Junction, stated his opposition to SB 105 and any bills that are for abortion. This country was formed around God and the family unit. SB 105 and others like it attack the family unit and destroy it. SB 105 is one step toward the New World Order Clan. Passage of SB 105 and others like it that permit abortion would be like slapping God in the face. Everyone who has a part of this will answer to God. EILEEN BECKER, Assistant Director of the Homer Crisis Pregnancy Center (HCPC) and mother, said that she had worked with women for the last eight years at HCPC. She supported SB 105. She characterized those who would oppose SB 105 as either the abortion clinics or parents who do not want to take responsibility for the actions of their children. She recounted the experiences she had with three pregnant minors at HCPC. SB 105 would send a message to minors that parents do care. She expressed amazement that minors cannot have their ears pierced without parental consent, while a child can go through an abortion alone. Number 471 LISA PENALVER, President of the Fairbanks Coalition for Choice, opposed SB 105. She indicated that parental involvement is a noble goal, but it is impossible to legislate a level of parental involvement. Parental consent in regard to abortions of minors is desirable; most teens do involve their parents. Those teens who do not involve their parents are situations in which the family structure is already distorted. She emphasized that an unplanned pregnancy was already difficult enough for teens without further barriers such as SB 105. Abortion nor pregnancy is to be taken lightly. She pointed out that the complications that Ms. Kohler attributed to abortion are actually risks of any sexual activity not explicitly abortion. The risk of complications for pregnancy is 11 times greater than for an early abortion. Ms. Penalver noted that sexuality issues in teens are treated differently than other issues that currently have parental involvement required. Teens are not required to receive parental consent for the treatment of sexually transmitted diseases. She pointed out that court appointments may pose a problem because in rural Alaska delays in appointments would be inevitable which would result in more second trimester abortions in teens. Second trimester abortions for teens greatly increases their health risks. SB 105 is designed to reduce the number of abortions. She felt that SB 105 would put minors seeking abortions who cannot talk to their parents at risk. Such minor women would either seek an illegal abortion or go through the court process. The court process would also pose delays and serious health complications. KELLY MAHONEY informed the committee that she has had 12 years experience in counseling pregnant teens. She concurred with the testimony of Ms. Penalver. She indicated that in her field she often sees children who have been coerced by their parents to have an abortion. She commented that the Alan Guttmacher Institute is a well respected institute for research; it is not a research arm of the Pro Choice organization. In a 1992 study, two percent of teens surveyed said that someone at the clinic attempted to push them into an abortion. One percent of those same teens said that they were pressured by the clinic to continue the pregnancy. In the same study, 18 percent of the young women who did not voluntarily inform their parents, but whose parents discovered their pregnancy, reported being forced by their parents to have an abortion. Ms. Mahoney asserted that healthy families would communicate about such a decision. A court procedure is unfriendly to teens. There would continue to be transportation problems in rural areas such as Mat-Su. She felt that most doctors and counselors do an excellent job in counseling teenagers in their decisions. She recommended focusing on funding model pregnancy prevention programs. She discussed a coalition in Mat-Su which taught abstinence based education in the school. This education resulted in a decrease in teen pregnancies; there were 65 teen pregnancies before the education and 23 teen pregnancies after the education. She said that such education programs proved better than clearing the path for increased child bearing, aid to families with dependent children recipients and increased strain on the medical budget. Ms. Mahoney stated that SB 105 was unclear as to how a child would prove to the court that she has issues that deter her from speaking to her parents. She suggested that research illustrates that teens having abortions have less emotional and physical traumas than those bearing children. SENATOR LEMAN announced that SB 105 would be held until Wednesday, March 22, 1995 for further testimony. Anyone interested in submitting written testimony could give it to the teleconference moderator in order to forward to the committee. Senator Leman relinquished control of the committee to Senator Green. SHES - 3/20/95 SB 117 STATEWIDE INDEPENDENT LIVING COUNCIL Number 405 CHAIRMAN GREEN introduced SB 117 as the next order of business before the committee. STAN RIDGEWAY, Deputy Director in Vocational Rehabilitation, explained that SB 117 was introduced at the request of the Department of Education (DOE). SB 117 establishes in statute a statewide independent living council which would allow the department to continue to receive federal funding. Approximately $900,000 in federal funding is received for independent living services across the state. He pointed out the analysis of the fiscal note which breaks down the funding sources. The Division of Vocational Rehabilitation receives federal Part B funds in the amount of $283,000 with a required state match. Federal Part C funding is granted to centers for independent living; Access Alaska and Southeast Alaskan Independent Living Center receive portions of that money. The state contributes $563,000 in general funds to centers in the state. Mr. Ridgeway explained that Governor Hickel had appointed a Statewide Living Council in 1993. The Division of Vocational Rehabilitation and the council are required to submit a state plan to the federal government in order to receive funding. He explained that Governor Hickel had reappointed the council in 1994 due to controversy regarding that the council was not established in statute. This needs to be established in statute in order to have an ongoing statewide living council. SENATOR SALO asked if the provisions in SB 117 were the same as those when the council was created under Governor Hickel. STAN RIDGEWAY stated that the council remains the same and he specified that the majority of the council's members are disabled. SENATOR LEMAN asked if the language specifying that a member be compensated with $150 for each day they perform services was the existing requirement. STAN RIDGEWAY said that there is not an existing federal requirement. The language merely allows compensation to a person that is unemployed or loses money from their job. Mr. Ridgeway specified that the amount parallels the compensation other boards offer. SENATOR LEMAN presumed that if this compensation was not required by federal law then it would not be in statute. STAN RIDGEWAY said that was correct, but that the compensation is required in Title VII of the Rehabilitation Act. SENATOR LEMAN suggested that this language may need to be redrafted in order to clarify. Number 345 CHAIRMAN GREEN asked if it was common to specify the amount to be compensated in the bill. SENATOR MILLER explained that this compensation would be in addition to the per diem and travel expenses of the member. There are other boards that have this such as the Permanent Fund Dividend Board and the Railroad Board. Most boards only receive a per diem. Senator Miller said that it is common to specify the amount for compensation. SENATOR ELLIS asked if Chairman Green was suggesting an automatic cost of living increase for boards and commissions. CHAIRMAN GREEN thought that if federal requirements changed then this would have to be rewritten. She stated that she did not know what the common procedure was. SENATOR ELLIS inquired as to the location of the removal or dismissal standards in SB 117. STAN RIDGEWAY stated that there is not a dismissal standard; the members are appointed for three year staggered terms. A member can only serve two consecutive terms. SENATOR ELLIS emphasized that a dismissal standard has to be addressed in some manner. SENATOR MILLER explained that if a dismissal standard is not specified then it would be at the pleasure of the governor. CHAIRMAN GREEN assumed that when reasons for dismissal are listed another problem would be created. SENATOR SALO suggested that this concern could be handled by inserting the language, "All members serve at the pleasure of the governor." on page 3, line 20. CHAIRMAN GREEN stated that the amendments could be drafted for Wednesday. SENATOR LEMAN pointed out that the next committee of referral for SB 117 was Senate Finance and his issue could be addressed in that committee. Number 298 SENATOR SALO moved her amendment, Amendment 1, which would insert the sentence, "All members shall serve at the pleasure of the governor." at the end of Section 3, line 20. STAN RIDGEWAY noted that federal law covers that; the governor appoints the board. He noted that each member of the board had been asked to resubmit an application to the governor's office for possible reappointment. CHAIRMAN GREEN explained that sometimes boards are bound by overriding federal laws which would be complicated with the addition of language encompassed in the amendment. SENATOR ELLIS stated that if the language is the same as the federal law, then the amendment should not be a problem. STAN RIDGEWAY did not foresee any conflict. CHAIRMAN GREEN inquired as to the pleasure of the committee regarding Amendment 1. Hearing no objection, Amendment 1 was adopted. SENATOR MILLER moved that CS SB 117(HES) be moved out of committee with individual recommendations. Hearing no objection, it was so ordered. SHES - 3/20/95 SB 123 POSTSECONDARY EDUCATION PROGRAMS Number 272 CHAIRMAN GREEN introduced SB 123 as the next order of business before the committee. JOE MCCORMICK, Executive Director of the Alaska Commission on Postsecondary Education, stated that SB 123 would achieve three objectives: the improvement of customer service, strengthen the financial stability of the Alaska Student Loan Program, and improvement of the overall program and its administration. He pointed out that the University of Alaska has increased its tuition by 250 percent since 1984 while loan limits have remained unchanged since 1981. Section 1 of SB 123 raises the loan limits. He presented a sectional analysis of SB 123. In discussion of the bill's objective to strengthen the financial stability of the loan program, Mr. McCormick informed everyone that the loan program is funded entirely through corporate receipts. This results in the program absorbing loans lost due to death, disability, default, and forgiveness on loans prior to 1987. The loss due to interest free deferment payments are also absorbed by the program. He emphasized that the statutory changes outlined in SB 123 are necessary in order for the loan fund to remain self- sufficient. Section 5 would eliminate the interest free deferment periods that students now receive; approximately $4 million in revenue is expected to be generated from the $50 million that would be lent next year. Section 14 would charge a five percent origination fee in order to cover losses in those cases that the program formerly absorbed which would generate approximately $2.5 million of the $50 million lent. Mr. McCormick explained that Section 17 provides that incarcerated persons would be ineligible for Alaska Student Loan funds due to their inability to demonstrate the ability to repay the loan. He noted that the Department of Corrections has an amendment to offer for Section 17 to which the ACPSE does not object. Number 180 Mr. McCormick highlighted the technical amendments that support the objective of the overall improvement of the program and its administration. Those amendments can be found in Sections 8, 15, 20, 24, and 27. He commented on the recent legislative audit which reported that the Alaska Student Loan fund could lose upward of $60 million by the year 2011. Those findings simply confirm what the council has known for some years; the Alaska Student Loan fund is not an actuarily sound loan fund. The findings of the report also point out that the State of Alaska would have in equity approximately $200 to $220 million in cash; that money is to be returned to the state treasury. He emphasized that the most important point to remember would be that the program by the year 2011 would have provided more than $900 million in student loans to 184,000 borrowers in Alaska. The legislative audit would seem to support SB 123. In conclusion, Mr. McCormick pointed out that the goal of the commission is to ensure that the Alaska Student Loan program is present and financially viable for the future. Number 112 SENATOR LEMAN expressed concern with the language that requires the state to pay the interest under Section 5. This would obligate the state rather than the fund. JOE MCCORMICK explained that Section 5 is reworded upon the advice of the Department of Law; the existing statute already requires that the state pay this interest during specified periods subject to appropriations. This is not an addition, the language has merely been reworded. SENATOR SALO commented that SB 123 is a good bill in that the changes make the program more actuarily sound. However, she did not want the program to become a profit making program at the expense of the students. She indicated that the best part of this program is the number of students that can access the program. She stated that in general she was supportive of the legislation. SENATOR ELLIS inquired as to the section changing the priority order of student loans and child support. JOE MCCORMICK stated that at present there is no priority on wage garnishments, it is a first come first serve basis. Child support has taken a priority in the past years and the commission would like to follow that and the remaining debt collectors would remain on the first come first serve basis. SENATOR ELLIS expressed concern in attempting to reach actuary soundness for the program with the collection of interest during deferment periods. What would the scenario be with regard to the effect of this on students? JOE MCCORMICK explained that bonds are issued and the holders receive interest on those bonds, every year that you pay interest to the bondholders for which you do not collect interest money is lost. More money is lost when a student is allowed to have an interest free loan during their time in school than during deferment periods. Mr. McCormick noted that was due to the fact that typically a deferment period would not be as long as the time a student attends school. TAPE 95-18, SIDE A Number 005 Mr. McCormick noted that the commission shared these concerns in developing the legislation. The commission chose not to charge interest during the period when a student attends school. The legislative audit report recommends that interest be charged when the student attends school. Mr. McCormick stated that under the circumstances he would agree with the legislative audit recommendation; interest should be charged for all the periods in which the commission pays interest. SENATOR SALO asked what the corrections amendment would achieve. JERRY SHRINER, Special Assistant to the Commissioner of Corrections, specified that the Department of Corrections' concern lies in the possibility that specifically removing any possibility for incarcerated persons to obtain a loan may result in court cases for the state or the department. The state and the department are required to provide incarcerated persons with various opportunities for rehabilitation. He noted that less than 10 incarcerated persons had applied for student loans of which none have been granted. Removing the possibility for application may allow the person to enter into court contesting that the state is acting in bad faith with regards to the Cleary settlement. SENATOR SALO asked if incarcerated persons pay tuition and for what would they need a loan. JERRY SHRINER stated that there are some inmates who will graduate from a college and either pay for the tuition themselves or have a pell grant. Mr. Shriner was not aware of any who used the Alaska Student Loan program. Number 071 CHAIRMAN GREEN said that inmates are not kept from education even without SB 123. JERRY SHRINER explained that even without this, the inmates would have the opportunity to pursue an education. Mr. Shriner clarified that Mike Stark and the Attorney General's Office were concerned that SB 123 would provide an opportunity for an inmate to go to court and charge that the state is acting in bad faith with respect to the Cleary settlement. Mr. Shriner suggested that the language be modified according to the amendment or remove Section 17 entirely. SENATOR SALO felt that there must be inmates who would owe money to the Alaska Student Loan corporation; what would happen to their payment schedules during incarceration? JOE MCCORMICK stated that the loan would be shown as in default and it would continue to accrue interest. The interest rate is 10 percent for defaulted loans. SENATOR SALO stated that such a scenario seemed more problematic than granting more loans to current inmates. She suggested reviewing that problem. JOE MCCORMICK informed the committee that the provision was present because there had been requests from incarcerated students to receive Alaska Student Loans. The Department of Law advised the commission that there was nothing in existing statutes to allow the denial of the loan. He explained that the provision is present in order to establish firm ground if an inmate is denied an Alaska Student Loan. Number 148 CHAIRMAN GREEN noted that there were other amendments that had been recommended by the department. SENATOR LEMAN moved a memo from the Commission on Postsecondary Education which would advance changes in Section 15 and 19, Amendment 1. Without objection, Amendment 1 was adopted. SENATOR LEMAN moved that CS SB 123(HES) be moved out of committee with individual recommendations. Hearing no objection, it was so ordered. CHAIRMAN GREEN announced that the committee would hear further testimony on SB 105 and SB 98 on Wednesday. There being no further business before the committee, the meeting adjourned at 10:55 a.m.