Legislature(1997 - 1998)

03/21/1997 09:05 AM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                         March 21, 1997                                        
                           9:05 a.m.                                           
  MEMBERS PRESENT                                                              
 Senator Gary Wilken, Chairman                                                 
 Senator Loren Leman, Vice Chairman                                            
 Senator Lyda Green                                                            
 Senator Jerry Ward                                                            
  MEMBERS ABSENT                                                               
 Senator Johnny Ellis                                                          
  COMMITTEE CALENDAR                                                           
 SENATE BILL NO. 36                                                            
 "An Act relating to transportation of public school students;                 
 relating to school construction grants; relating to the public                
 school foundation program and to local aid for education; and                 
 providing for an effective date."                                             
  - HEARD AND HELD                                                             
 SENATE BILL NO. 11                                                            
 "An Act relating to state aid for school construction debt; and               
 providing for an effective date."                                             
  - MOVED CSSB 11(HES) OUT OF COMMITTEE                                        
 SENATE BILL NO. 96                                                            
 "An Act regulating hospice care."                                             
  - HEARD AND HELD                                                             
 SENATE BILL NO. 58                                                            
 "An Act relating to the privilege to drive of minors and to the               
 penalty for the consumption or possession of alcoholic beverages by           
 persons under 21 years of age."                                               
  - SCHEDULED BUT NOT HEARD                                                    
  PREVIOUS SENATE COMMITTEE ACTION                                             
 SB 36 - See Senate Health, Education & Social Services Committee              
         minutes dated 2/12/97, 3/14/97, 3/17/97 and 3/19/97.                  
 SB 11 - See Senate Health, Education & Social Services minutes                
         dated 2/26/97.                                                        
 SB 96 - See Senate Health, Education & Social Services Committee              
         minutes dated 2/24/97.                                                
 SB 58 - See Senate Health, Education & Social Services minutes                
         dated 3/10/97.                                                        
  WITNESS REGISTER                                                             
 John Cyr, President                                                           
 National Education Association-Alaska                                         
 114 Second Street                                                             
 Juneau, Alaska 99801                                                          
  POSITION STATEMENT:   Discussed education funding.                           
 Al Weinberg                                                                   
 Single Site School District Consortium                                        
 300 Hermit Street #12                                                         
 Juneau, Alaska 99801                                                          
  POSITION STATEMENT:   Discussed SB 36.                                       
 Deborah Vogt, Deputy Commissioner                                             
 Department of Revenue                                                         
 PO Box 110405                                                                 
 Juneau, Alaska 99811-0400                                                     
  POSITION STATEMENT:   Discussed the tax provisions of SB 36.                 
 Brett Huber, Staff                                                            
 Senator Halford                                                               
 State Capitol                                                                 
 Juneau, Alaska 99801-1182                                                     
  POSITION STATEMENT:   Discussed the proposed amendment.                      
 Mike Morgan, Facilities Manager                                               
 Department of Education                                                       
 801 W. 10th Street, Suite 200                                                 
 Juneau, Alaska 99801-1894                                                     
  POSITION STATEMENT:   Discussed the department's overhead charge and         
                     the proposed amendment.                                   
 Larry Wiget, Director                                                         
 Government Relations                                                          
 Anchorage School District                                                     
 4600 DeBarr Road                                                              
 Anchorage, Alaska 99519                                                       
  POSITION STATEMENT:   Supported SB 11 and the amendment.                     
 Bob Doyle, Finance Director                                                   
 Mat-Su School District                                                        
 1900 Porcupine Trail                                                          
 Wasilla, Alaska 99654                                                         
  POSITION STATEMENT:   Supported amendment and discussed the                  
                      situation in Mat-Su.                                     
 Beth McKibben                                                                 
 Mat-Su Borough Planning Department                                            
 350 E Dahlia                                                                  
 Palmer, Alaska 99645                                                          
  POSITION STATEMENT:   Discussed the demographics of Mat-Su.                  
 Charles Huggins, Parent                                                       
 School Board Member                                                           
 PO Box 878115                                                                 
 Wasilla, Alaska 99687                                                         
  POSITION STATEMENT:   Discussed the situation in Mat-Su.                     
 Barbara Lacher, Mayor                                                         
 City of Wasilla                                                               
 775 E Parks Highway                                                           
 Wasilla, Alaska 99654                                                         
  POSITION STATEMENT:   Noted the need for a commitment to funding.            
 Ben Brown, Staff                                                              
 Senator Kelly                                                                 
 State Capitol                                                                 
 Juneau, Alaska 99801-1182                                                     
  POSITION STATEMENT:   Discussed the changes in CSSB 96(HES).                 
 Paula McCarron                                                                
 Hospice of Anchorage                                                          
 3305 Arctic Boulevard #105                                                    
 Anchorage, Alaska 99503                                                       
  POSITION STATEMENT:   Discussed SB 96.                                       
 Patricia Senner, Executive Director                                           
 Alaska Nurses Association                                                     
 237 E Third Avenue #3                                                         
 Anchorage, Alaska 99501                                                       
  POSITION STATEMENT:   Supported CSSB 96(HES).                                
 Mike Shiffer                                                                  
 Board of Hospice of Anchorage                                                 
 8561 Ridgeway Avenue                                                          
 Anchorage, Alaska 99804                                                       
  POSITION STATEMENT:   Supported this legislation.                            
 Tina Kocsis, Director                                                         
 Hospice of Tanana Valley                                                      
 PO Box 82770                                                                  
 Fairbanks, Alaska 99708                                                       
  POSITION STATEMENT:   Urged that steps be taken to eliminate any             
                      hardships for volunteer hospices created by              
                      this licensing.                                          
 Barbara Rich                                                                  
 PO Box 80482                                                                  
 Fairbanks, Alaska 99708                                                       
  POSITION STATEMENT:   Discussed the cost concerns with SB 96.                
 Charles Quarre, President                                                     
 Hospice of the Central Peninsula                                              
 HC-1 Box 3336                                                                 
 Sterling, Alaska 99672                                                        
  POSITION STATEMENT:   Requested that volunteer hospices be deleted           
                      from SB 96.                                              
 Shelby Larsen, Administrator                                                  
 Health Facilities Licensing & Certification                                   
 4730 Business Park Boulevard, Suite 18                                        
 Anchorage, Alaska 99503-7117                                                  
  POSITION STATEMENT:   Supported SB 96.                                       
  ACTION NARRATIVE                                                             
  TAPE 97-31, SIDE A                                                           
                  SB  36 PUBLIC SCHOOL FUNDING                                
 Number 001                                                                    
  CHAIRMAN WILKEN  called the Senate Health, Education & Social                
 Services Committee (HES) to order at 9:05 a.m. and introduced                 
 CSSB 36(HES)  as the first order of business.                                 
  JOHN CYR , President of NEA-AK, informed the committee that he was           
 testifying from San Diego, California.  Mr. Cyr informed the                  
 committee of the following demographics:                                      
  34 percent of Alaskans are children                                          
  15 children commit suicide every year                                        
  85 children die of injury, homicide, suicide, unintentional                  
  125 babies die before reaching age one                                       
  160 babies are born with fetal alcohol syndrome                              
  580 babies are born at low birth weight                                      
  600 children are admitted for inpatient psychiatric care                     
  915 babies are born to mothers with less than 12 years of                    
  1,235 babies are born to teenager mothers                                    
  1,450 children will be arrested for felony offenses                          
  more than 2,000 children will drop out of school                             
  3,500 children are reported as runaways                                      
  3,700 children are abused or neglected                                       
  10,500 preschoolers live below the poverty level                             
  almost 25,000 children receive AFDC                                          
 Mr. Cyr said that all these children are in Alaska's schools.  What           
 is done with the foundation formula has a direct impact on those              
 children.  In the first year Alaska was a state, 44 percent of the            
 budget went towards education.  By 1970, that amount had dropped to           
 35 percent and in 1991 that was 17 percent.  The foundation was               
 $60,000 in 1987-88, then in 1992 the foundation unit increased to             
 $61,000.  Mr. Cyr noted that in 1996, Alaska ranked last in                   
 resource allocation towards education for all 50 states.  Alaska              
 also ranked last in aggregate salary for education employees after            
 being inflation adjusted.  There has been a 10.9 percent loss in              
 real buying power since 1985/86.  In the classroom, that results in           
 larger class sizes.  Mr. Cyr informed that committee that in his              
 last year at Wasilla High School, he had 168 children in 5 classes.           
 One cannot deliver the program needs with that many children.                 
 Alaska ranks 49 in the number of advanced placement classes offered           
 in the U.S.  Alaska pays less attention to marginal students.                 
 Alaskan schools have inadequate technology.  Schools do not have              
 academic or vocational counseling at the elementary level, there is           
 one counselor at most middle schools.  Mr. Cyr believed that the              
 children of Alaska are being done a great disservice.                         
 Mr. Cyr turned to the foundation formula.  He asked if the numbers            
 on the reallocation of dollars in each of the five years were                 
  CHAIRMAN WILKEN  said that those numbers are being developed and             
 should be available today or the first of the week.  Chairman                 
 Wilken reminded Mr. Cyr that in years three through five, the                 
 reallocation becomes a function of the ACD study.                             
  JOHN CYR  calculated that over the first two years of the program,           
 Anchorage gains a little over $16 million, Fairbanks gains $5.1               
 million, Mat-Su gains $69,000 and Kenai and Juneau pick up a little           
 less than $1 million.  Mr. Cyr asked if those numbers are correct.            
  CHAIRMAN WILKEN  did not know and suggested that Mr. Cyr provide the         
 committee with his concerns about CSSB 36(HES).                               
  JOHN CYR  said that the equalization of funding must be based on             
 programs and not the equalization of dollars.  In fact rural                  
 dollars are being removed from rural children, for the short term             
 benefits of urban districts.  NEA-AK believes that to be a mistake.           
 Funding must also reflect the needs of students in single site                
 districts.  Mr. Cyr stated that it was unacceptable for the                   
 students of single site districts to be left political hostage                
 every year.  Full funding must come with student growth which is              
 unprecedented in Alaska.  Some mechanism must be built into the               
 foundation formula for increased renovation, research grants,                 
 incentive grants, new programs for violent students and parental              
 involvement technology.                                                       
 Mr. Cyr was pleased that pupil transportation was included as well            
 as the area cost differential study.  Mr. Cyr noted that Alaska has           
 experienced a 30 percent loss in buying power, inflation proofing             
 is necessary.  Oversight and auditing positions are missing from              
 this proposal; those positions would assure that education dollars            
 are being spent on education.                                                 
 Number 199                                                                    
  SENATOR WARD  believed that Mr. Cyr indicated that NEA-AK was                
 opposed to CSSB 36(HES).  Is NEA-AK opposed to or in favor of the             
 Governor's proposal or Senator Randy Phillip's proposal?  Senator             
 Ward asked if Mr. Cyr had his own proposal.   JOHN CYR  said that             
 NEA-AK was not in opposition to CSSB 36(HES) or SB 146 in its                 
 entirety.  All of the proposals have some positive aspects.  Mr.              
 Cyr informed the committee that NEA-AK liked the incentive grants             
 and Quality Schools Initiative in SB 85.  The area cost                       
 differential study is good.  Mr. Cyr suggested that the best of               
 each be packaged as one bill.  In further response to Senator Ward,           
 Mr. Cyr clarified that NEA-AK supports a number of items in this              
 bill and others as well as opposed to some of the provisions.                 
  SENATOR WARD  thought that Mr. Cyr indicated that the communities of         
 Anchorage, Fairbanks, Juneau, and Kenai were to receive more than             
 a fair share; is that correct?   JOHN CYR  said that it is a mistake          
 to take money from rural children.   SENATOR WARD  inquired as to how         
 much those numbers should be reduced for the various communities              
 Mr. Cyr cited.  Does NEA-AK want those allocations to be reduced?             
  JOHN CYR  replied, no.   SENATOR WARD  said that it would be helpful         
 to have suggestions regarding the allocations, if Mr. Cyr had such.           
  JOHN CYR  said it would be easy to determine the money necessary to          
 fund education across the state.                                              
 Number 245                                                                    
  SENATOR LEMAN  noted that Mr. Cyr supported the incentive grants for         
 schools while in the past incentive grants for teachers have been             
 opposed by NEA-AK.  Senator Leman asked if this was a philosophical           
 shift towards his view that teachers should be paid on performance            
 instead of encouraging mediocrity.   JOHN CYR  did not know that              
 mediocrity was being encouraged.  Mr. Cyr said that he would be               
 happy to review any concrete proposals regarding incentive grants             
 for teachers with Senator Leman.                                              
  SENATOR LEMAN  said that in the past, NEA-AK's opposition has been           
 rooted in who actually decides who receives the grant.  Senator               
 Leman believed that there was merit for incentive grants for                  
 schools.  Therefore, if an incentive grant is appropriate for                 
 schools it should also be for teachers.  Senator Leman urged Mr.              
 Cyr to think about this issue.                                                
  CHAIRMAN WILKEN  informed the committee that he had ran some numbers         
 in order to get a sense of the growth of the formula.  Those                  
 numbers say that the formula has grown 50.2 percent in actual                 
 dollars and the ADM has increased 23 percent during that same                 
 period.  Therefore, inflation proofing has been built in and the              
 state has kept up with inflation proofing the formula.  With                  
 regards to Mr. Cyr's comments about delivery by program, how would            
 that be accomplished?   JOHN CYR  believed that most could agree on           
 the general areas of what it takes to have a quality school which             
 makes it possible to determine the program needs of schools.  Mr.             
 Cyr informed the committee that in his last years teaching, his               
 classroom supplies consisted of a box of chalk.  Mr. Cyr suggested            
 that the costs of supplies should be reviewed in order to deliver             
 a program.                                                                    
  CHAIRMAN WILKEN  pointed out that the ACD study in the bill would            
 review the cost of running a school, not a school district.   JOHN            
 CYR  said that NEA-AK was on board with that.  Mr. Cyr inquired as            
 to what happens to the children when a school with less than 10               
 students is closed.  How many small schools would be closed?                  
  CHAIRMAN WILKEN  said that very few, if any schools would close, but         
 there are centralized correspondence programs within Alaska.                  
 Number 311                                                                    
  AL WEINBERG , representing the Single Site School District                   
 Consortium, appreciated the goals set forth for the revision of the           
 foundation program.  Mr. Weinberg was not convinced that this                 
 proposal was any simpler.  Equity is extremely important, but                 
 unfortunately there is no mention that school districts be provided           
 adequate funding.  Mr. Weinberg noted that a purpose statement of             
 the foundation formula as well as the proposal before the committee           
 is that the foundation formula provide an equitable level of                  
 educational opportunities.  The proposed formula takes portions of            
 other proposed formulas which means that those components may not             
 produce the same result, especially with equity.  Mr. Weinberg                
 noted that the adverse impacts occur to single site districts,                
 REAAs, and rural boroughs.  In the second year, 15 single sites               
 would face reduced funding as would 10 REAAs and 5 rural boroughs.            
 During this same time, the winner districts would receive an                  
 additional $25 million while the losers would loss about $14                  
 million.  Of the $25 million going to the winner districts, $15               
 million would be given to Anchorage and Fairbanks.  Mr. Weinberg              
 stressed that there is no assurance that the additional $15 million           
 would benefit the children in those districts because the local               
 district could reduce its local contribution.                                 
 Mr. Weinberg believed that the 20 percent supplemental needs factor           
 was simpler than the existing categorical funding, however it is              
 not necessarily more equitable.  For instance, the current                    
 percentage statewide in special education enrollment is 14 percent            
 while the spread ranges from 7.3 percent to 38.9 percent.  The                
 spread is even greater for bilingual education.  Mr. Weinberg                 
 pointed out that the 20 percent supplemental needs factor would not           
 eliminate the federal and state requirements that school districts            
 identify special needs students and provide appropriate programs              
 for those students.  The concern is that this may adversely effect            
 equity for the sake of simplicity.                                            
 Mr. Weinberg applauded the area cost differential study.  The                 
 proposed study is a bit more extensive, addressing the size factor            
 and the single site factor.  Mr. Weinberg noted that the                      
 Legislature has not accepted the results of past studies.  The                
 notion that the area cost differential be reviewed by funding                 
 community is meritorious, however the numbers to be in effect prior           
 to the study are flawed.  For example, Bristol Bay and Wales have             
 the same area cost differential as do Bethel and Lyon Village.                
 Bethel is a major river port and airport while Lyon Village is one            
 of the most remote villages in Alaska.                                        
 Number 401                                                                    
 With regard to the REAA tax, this is the most regressive tax and is           
 being imposed in may instances on the poorest in Alaska.  Mr.                 
 Weinberg did not have a problem with taxpayer equity in Alaska,               
 however this proposal does not provide such taxpayer equity.  In              
 conclusion, Mr. Weinberg hoped that the focus remain on the                   
 children and adequate and equitable funding for all children                  
 regardless of geographic location, community wealth, or political             
  SENATOR LEMAN  understood Mr. Weinberg's testimony to be that the            
 proposal before the committee was not equitable.  Senator Leman               
 asked Mr. Weinberg if he believed that everyone should participate            
 in some manner in funding a local share.   AL WEINBERG  did not have          
 a problem with that concept.  That is not occurring now in the                
 municipal districts, but there is no contribution from REAAs now.             
  SENATOR LEMAN  expressed interest in Mr. Weinberg's proposal.   AL           
 WEINBERG  identified the following as more equitable solutions:  a            
 statewide property tax including REAAs as well as municipal                   
 districts, a statewide income tax applied to all earners in Alaska,           
 and a flat school tax on all earners in Alaska.  By singling out              
 those in REAAs, the state would be requiring a tax on those                   
 citizens while not requiring a tax on citizens in municipal                   
 districts for the support of schools.  Mr. Weinberg recognized that           
 many municipal districts do levy property taxes on property owners            
 for the support of schools, but not all municipal districts do.               
  SENATOR LEMAN  pointed out that all municipal districts do                   
 participate with a local share in some way.  Senator Leman                    
 understood Mr. Weinberg to mean that in order to make the proposal            
 before the committee less regressive the tax should apply to more             
 people, but an income tax is regressive.   AL WEINBERG  clarified             
 that an income tax based on the ability to pay is typically                   
 referred to as progressive.  A tax that disproportionately takes a            
 higher percentage of income from poor people than from wealthy                
 people as would a head tax or a sales tax, is  referred to as                 
  CHAIRMAN WILKEN  inquired as to Mr. Weinberg's thoughts about a two          
 percent tax or a tax on gross earnings that is remitted on a                  
 quarterly basis, only in REAAs.  Chairman Wilken explained that the           
 numbers show that the local contribution required from the                    
 organized areas to qualify for state need is about 15.6 percent.              
 The REAA need is about $150 million in 1996, therefore 15 percent             
 of that would result in about $24 million.  In 1995, about $475               
 million in wages was paid in the REAAs outside of organized areas.            
 If a five percent labor tax was taken on gross wages, about $23               
 million would result.  Therefore, the REAAs would end up paying               
 essentially what all the organized areas are paying.                          
  AL WEINBERG  did not know if it was more equitable.  The only way to         
 achieve equity is to have a statewide program that impacts all in             
 the same way.  Mr. Weinberg agreed with Chairman Wilken that there            
 are organized areas that are paying 15 percent of the local school            
 need in order to qualify for state money and there are REAAs that             
 do not pay anything to receive that same money.  Mr. Weinberg                 
 pointed out that there are those in organized areas who pay nothing           
 as well.  For example, the Denali Borough receives revenue from a             
 bed tax which is paid primarily by tourists and not the residents             
 of the borough.                                                               
   With regard to the issue of single sites,  CHAIRMAN WILKEN  noted           
 that there has been much discussion about cutting the budget and              
 forcing consolidation.  Chairman Wilken informed everyone that 13             
 percent of Alaska's students are in 70 percent of its school                  
 districts.  Chairman Wilken hoped that the area cost differential             
 would provide for consolidation of school districts in Alaska.                
 There are school districts that need to be consolidated and                   
 hopefully, the study will illustrate how that can be done.                    
 Number 503                                                                    
  DEBORAH VOGT , Deputy Commissioner of the Department of Revenue,             
 said that she would be discussing the tax provisions of the                   
 legislation.  Ms. Vogt understood the rationale for levying a tax             
 on a portion of Alaska.  The courts will review whether the lines             
 of distinction of a tax are rational or not.  As a former Attorney            
 General, Ms. Vogt was familiar with the standards utilized for                
 equal protection as applied to tax.  Ms. Vogt said that it was a              
 fairly lax standard.  The distinction here is for the purpose of              
 reducing an inequity and there can be some justification for this.            
 Ms. Vogt stated that the question would be whether this legislation           
 provides that equity.                                                         
 Ms. Vogt agreed with Mr. Weinberg that the flat employment tax is             
 a very regressive tax.  Property taxes are progressive, the tax is            
 related to the value of the property.  Although a sales tax is                
 traditionally viewed as regressive, it is related to the amount of            
 goods and services purchased.  A flat employment tax would impact             
 those without the ability to pay more than those making better                
 wages.  Ms. Vogt noted that there are ways to address this such as            
 the statewide property tax.  The oil and gas property tax is a                
 statewide tax with a credit for any municipal tax paid on that                
 property which would be possible on a statewide property tax.  Ms.            
 Vogt acknowledged that such a tax would necessitate a legion of               
 assessors, furthermore each municipality does not determine its               
 contribution in the same way.  Ms. Vogt said that a more equitable            
 tax would be a percentage of earnings.  In conclusion, Ms. Vogt               
 mentioned that the legislation exempted nonresidents.  She was                
 unsure as to this exemption because taxes generally apply to the              
 people who take advantage of the economic opportunity in places               
 where the tax is levied.  In response to Chairman Wilken, Ms. Vogt            
 said that was located on page 23, line 28.                                    
  CHAIRMAN WILKEN  held CSSB 36(HES) and informed the committee that           
 SB 146 would be before the committee Monday, but there would not be           
 any public testimony.                                                         
                SB  11 SCHOOL DEBT REIMBURSEMENT                              
  CHAIRMAN WILKEN  introduced  SB 11  as the next order of business            
 before the committee.  The committee took a brief at ease and                 
 Chairman Wilken announced that SB 58 would not be taken up today.             
 Chairman Wilken noted that there is an amendment for SB 11.                   
 Number 580                                                                    
  BRETT HUBER , Staff to Senator Halford, noted that Senator Halford           
 had provided the committee with an amendment for consideration.               
 The amendment is a result of testimony and committee discussion               
 during the last hearing of SB 11.  The amendment changes the date             
 of reactivation of the school bond debt reimbursement program from            
 July 1, 1995 instead of July 1, 1997.  The amendment also changes             
 the reimbursement level from 50 to 70 percent which applies to                
 future funding that receives authorization and local voter                    
 approval.  The amendment broadens the qualification criteria for              
 DOE to improve the projects which includes a reduction in school              
 districts' operating costs because of the project or facilities               
 that require modification/rehabilitation to improve the                       
 instructional program.  Mr. Huber pointed out that adoption of this           
 amendment would allow the Mat-Su three school package approved by             
 local voters in 1995 as well as the Anchorage package scheduled for           
 April for the reimbursement program.                                          
  TAPE 97-31, SIDE B                                                           
  CHAIRMAN WILKEN  noted that SB 11 would be held for a committee              
 substitute to include these changes.  Mr. Morgan is present to                
 discuss the overhead charge from DOE.                                         
  SENATOR WARD  moved to adopt the amendment which reads as follows:           
 Page 3, line 30:                                                              
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  Delete " 50 "                                                              
  Insert " 70 "                                                              
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  Delete " 1997 "                                                            
  Insert " 1995 "                                                            
 Page 5, line 26, following "enrollment;":                                     
  Delete "or"                                                                  
  Insert "[OR]"                                                                
 Page 5, line 28, following "codes":                                           
  Insert ";                                                                    
     (C) operating costs that would be reduced by the                         
     (D) facilities that require modification or                              
   rehabilitation for the purpose of improving the                             
   instructional program "                                                    
 Page 5, line 29:                                                              
  Delete "takes effect July 1, 1997"                                           
  Insert "is retroactive to July 1, 1995"                                      
 Page 5, following line 29:                                                    
  Insert a new bill section to read:                                           
   " *Sec. 6.  This Act takes effect immediately under AS                      
  CHAIRMAN WILKEN  noted that the reimbursement level has bounced              
 around.  He believed that it would be best to make the percentage             
 75 and discussed that with Senator Halford.  Chairman Wilken asked            
 if Mr. Huber and Senator Halford had discussed that issue.   BRETT            
 HUBER  said that he had talked with Senator Halford about that                
 issue.  Senator Halford is not opposed to that idea, that is a                
 policy call.   CHAIRMAN WILKEN  requested that Mr. Huber notify               
 Senator Halford that was discussed and requested that it be                   
 included in the forthcoming CS.                                               
  MIKE MORGAN , Facilities Manager for the Department of Education,            
 explained that as districts apply for reimbursement of the                    
 principle the district has paid on bonds, the interest the district           
 paid, and for any fees associated with the bonds.  When the                   
 department includes that in the budget request for the year, the              
 department adds the overhead amount to that district's request.               
 There are no reductions in the request of the district.  Mr. Morgan           
 clarified that as long as the Legislature fully funds the requests            
 of districts, the district receives 100 percent.  If there is a               
 reduction in funding, that is not taken from the districts.                   
 With regard to the amendment, Mr. Morgan noted that the amendment             
 was in response to a suggestion by the department.  Mr. Morgan                
 noted that as written, the amendment has language saying "if a                
 district can demonstrate an operating cost reduction".  Therefore             
 if a district shows that it can save $1,000 per year with a                   
 project, but the cost of the project is $12 million the department            
 would have to approve that project.  On the grant side, there are             
 statute provisions that specify that the grant should be reviewed             
 and in the best interest of the state.  There is an opportunity for           
  BRETT HUBER  said that portion of the amendment was included per the         
 department's testimony at the last hearing.  Mr. Morgan's point               
 makes sense, as the criteria is broadened and the percentage of               
 state funding is increased; those are issues to review.                       
  CHAIRMAN WILKEN  asked if there was any objection to the amendment.          
 Hearing none, the amendment was adopted.  SB 11 was held for the              
 pending committee substitute.  Chairman Wilken realized there were            
 witnesses via teleconference for SB 11.                                       
  LARRY WIGET , Director of Government Relations for the Anchorage             
 School District, supported SB 11 and the amendment.  This Spring              
 Anchorage voters will be asked to approve a bond for capital                  
 construction in the amount of $24,593,000.  Currently, there is no            
 debt reimbursement if these bonds pass and changing the effective             
 date to July 1, 1995 would include these bonds.  Mr. Wiget said               
 that a state to local match provides an incentive for voters to               
 approve bonds, enables districts to stretch dollars to cover much             
 needed school construction and demands public accountability.                 
  BOB DOYLE , Finance Director for the Mat-Su School District,                 
 supported the amendment.  Mr. Doyle indicated the need for                    
 assurance that the Legislature is committed to funding SB 11 and              
 the intent of debt reimbursement.  Next year, Mat-Su expects 12,606           
 students.  Mat-Su is the third largest district in the state with             
 an annual growth of seven percent over the last 20 years.  Mr.                
 Doyle emphasized that the Mat-Su district is growing at two percent           
 per year which equates to 250 students per year.  Therefore, the              
 district would need to build a new elementary school every two                
 years in order to house those students, but that has not been done.           
 Mat-Su has 1,000 students that are taught in portables and the                
 majority of the schools are over capacity.  Mr. Doyle pointed out             
 that three necessary schools were approved by voters and are                  
 awaiting legislative support.  Mr. Doyle discussed some of the                
 projects included in the six year capital improvement program for             
  BETH MCKIBBEN , the Mat-Su Borough Planning Department, said that            
 the Mat-Su Borough is one of the fastest growing areas in the                 
 state.  Between 1990 and 1996, Mat-Su's population increased by               
 11,076 which is a 4.7 percent annual increase, the highest annual             
 growth rate in Alaska.  Since 1990, the Meadow Lakes population has           
 increased by 2,311 with an annual average growth rate of 13.1                 
 percent.  Palmer has increased by 7.9 percent annually, Big Lake by           
 7.3 percent annually, and Butte by 3 percent.  Ms. McKibben said              
 that those communities are four of the fastest growing areas in               
  CHARLES HUGGINS , parent and school board member, noted that most in         
 the Mat-Su district were pleased with the 50-50 proposition, and              
 even more pleased with the 70-30 proposition.  Mr. Huggins informed           
 the committee that the elementary school in Big Lake has a capacity           
 of 500 which increased to 723 students this year.  This increase              
 resulted in the need for portables and an increase in staffing.               
 Mr. Huggins  stressed that accommodating that increase in students            
 is challenging.  There have been some special sessions with the               
 community in order to determine how to reduce those numbers, but              
 that is disruptive.  The public questions why new schools cannot be           
 built.  Mr. Huggins echoed Ms. McKibben's comments that Meadow Lake           
 is one of the fastest growing areas in Alaska and there is not even           
 an elementary school in that community.  Mr. Huggins discussed the            
 situation in the Talkeetna School where the ceiling in one room is            
 covered with visqueen that connects to a hose in order to evacuate            
 the incoming water.  The amendment heads in a positive direction              
 for that situation.  Also the community is reviewing year-round               
 schooling in order to accommodate the population.                             
 Number 412                                                                    
  BARBARA LACHER , Mayor of Wasilla, believed that the ease with which         
 the amendment was adopted would indicate the ease with which the              
 forthcoming CS would be reported out of committee.  Mayor Lacher              
 hoped that when the bill is before the entire Legislature, there              
 will be a commitment to funding in the short term as well as the              
 long term.  Mayor Lacher was pleased with the consideration of the            
 increased percentage.  Mayor Lacher informed the committee that               
 increasing the percentage from 50 to 70 percent would save the                
 average homeowner $100 per year and over a 20 year bond repayment             
 that would result in a savings of $2,000 per year.  Mayor Lacher              
 said that the Mat-Su Borough would help with this legislation.                
  CHAIRMAN WILKEN  requested that Mr. Morgan submit some written               
 testimony regarding over head charges in order that the testimony             
 could be sent to some of the school districts.                                
               SB  96 REGULATION OF HOSPICE CARE                              
  CHAIRMAN WILKEN  introduced  SB 96  as the next order of business and        
 noted that there was a CS for consideration.  Chairman Wilken said            
 that he would entertain a motion.                                             
  SENATOR LEMAN  moved to adopt CSSB 96(HES), Lauterbach version dated         
 3/10/97, for discussion purposes.  Without objection, it was so               
  BEN BROWN , Staff to Senator Kelly, recalled that there had been             
 some questions regarding why volunteer hospice programs were being            
 regulated.  After conferring with Hospice of Anchorage, the                   
 requestor of the bill, Mr. Brown said that the legislation attempts           
 to provide some consumer protection and provide a standard.  SB 96            
 would allow people to know what to expect when entering into a                
 hospice situation.  In order to avoid a loophole in the original              
 bill, the CS specifies under Article 2 which standards are applied            
 to the volunteer hospice programs.  Mr. Brown emphasized that SB 96           
 intends to establish minimal standards.  Mr. Brown acknowledged the           
 concern that the regulations adopted to enforce the standards could           
 be complicated.                                                               
 Some of the definitions were also changed in Article 3.  On page 8,           
 the Administrative Procedure Act is referenced in order to protect            
 those whose license is revoked.  The definition of "hospice                   
 program" was changed by deleting the reference to "discrete entity"           
 because some of the Hospitals and Nursing Homes feared that would             
 not allow them to offer a hospice program within the institution.             
 The definition of "interdisciplinary team" was changed to include             
 a primary health care provider in order to cover a physician or an            
 advanced nurse practitioner allowing flexibility.  The definition             
 on line 14, page 9 was changed to "primary health care provider" to           
 conform with the aforementioned change.                                       
  SENATOR LEMAN  asked for clarification regarding the change from             
 primary physician to health care provider with regard to page 9,              
 line 9.   BEN BROWN  clarified that the definition of "medical                
 director" would still require a licensed physician and that                   
 definition only applies to the certified programs.  The definition            
 of "interdisciplinary team", those who coordinate the care plan of            
 a dying person, was changed to a health care provider.  The other             
 change to a health care provider is located on line 14, page 9.               
 Number 250                                                                    
  CHAIRMAN WILKEN  inquired as to the burden this would create for a           
 volunteer hospice, a noncertified hospice, with regard to the cost            
 and administrative requirements.  Chairman Wilken requested that              
 Mr. Brown submit an answer to the committee in writing.                       
  PAULA MCCARRON  informed the committee that she had been employed            
 with Hospice of Anchorage since 1982.  She noted the changes to               
 accommodate the volunteer hospices.  Ms. McCarron informed the                
 committe of legislation in Virginia which did not include the                 
 volunteer hospice category, now those volunteer hospices are                  
 battling to preserve the volunteer programs since there is no                 
 definition allowing for the volunteer hospice to exist.  Ms.                  
 McCarron believed that SB 96 would preserve the tradition of                  
 volunteer hospices as well as legitimizing the volunteer programs             
 by increasing funding opportunities in the future.  Hospice of                
 Anchorage has grown from volunteer efforts of concerned community             
 members and health care workers who desired an alternative to                 
 terminally ill persons to stay at home.  There have been many                 
 changes since that time.  Ms. McCarron noted that the average                 
 length of a hospital stay for hospitalized patients is down to                
 three or four days.  Hospitals once had social admissions which               
 would alleviate the stress of family members caring for a dying               
 loved one; this is rarely an option.  Coverage for nursing and                
 assisted living homes is limited and out of the reach for most                
 Alaskans.  All of these factors with the increasing aging                     
 population and people living alone translates into a growing need             
 for quality hospice services.  SB 96 is primarily a consumer                  
 protection act.                                                               
  PATRICIA SENNER , Registered Nurse and Executive Director of the             
 Alaska Nurses Association (ANA), supported CSSB 96(HES) which will            
 help develop the type of quality services needed for this time in             
 life.  The Nursing Association likes the two-tier approach in the             
 legislation.  A minimal standard for volunteer hospices prevents              
 them being regulated out of business while providing the public an            
 avenue in which to take action against unscrupulous providers.  Ms.           
 Senner noted that those hospices receiving reimbursement receive it           
 from national insurance companies who may require licensure for               
 reimbursement.  Ms. Senner said that the ANA is pleased with the              
 bill's emphasis on the role of the registered nurse and advanced              
 nurse practitioners.  Advanced nurse practitioners were requested             
 for inclusion in the definition of primary care provider.  In                 
 Alaska, advanced nurse practitioners are allowed to have                      
 independent practice and are increasingly caring for dying seniors.           
 Ms. Senner emphasized that the ANA completely agrees with the                 
 hospice philosophy as outlined in the bill.                                   
 Number 140                                                                    
  MIKE SHIFFER , Board of Hospice in Anchorage, informed the committee         
 that Hospice of Anchorage is a private nonprofit organization that            
 does not receive any state funds.  Alaska needs licensed hospice              
 programs.  The environment of health care is changing.  Hospice               
 programs make it possible for the terminally ill to die in a home             
 environment by focusing on comfort care.  Hospice involves the                
 coordinated use of and interdisciplinary team including physicians,           
 nurses, social workers, therapists, pastoral and bereavement                  
 counselors, and volunteers.  The unique component of hospice's                
 interdisciplinary team is its volunteers.  Hospice of Anchorage               
 provides hospice services without regard for ability to pay.                  
 Hospice works with the patient and family to accept death as a                
 natural part of life; the family and the patient are considered the           
 unit of care.  Mr. Shiffer noted that hospice addresses the                   
 spiritual, emotional, social, physical care and comfort of the                
 patient.  Licensure will ensure that hospice services are provided            
 according to an established standard.  Mr. Shiffer strongly                   
 supported this legislation.  Mr. Shiffer referred Chairman Wilken             
 to page 6, subsection (j) which clarifies his previous question.              
  TINA KOCSIS , Director of Hospice of Tanana Valley, said that she            
 would speak to the issue of the two different hospices in Alaska,             
 volunteer hospices and certified or for profit hospices.  With                
 regards to the notion that certified hospices are more organized              
 than volunteer hospices, Ms. Kocsis said that was not correct.                
 According to the National Hospice Organization and Medicare                   
 standards, volunteer hospices have medical directors.  The position           
 is merely voluntary.  As a volunteer hospice in Fairbanks, it does            
 not employee nurses, physical therapists, or other related medical            
 personnel but work closely with home health nursing providers.                
 Patients are not charged for any services and no payments are                 
 received from any third-party payers.  The Hospice of Tanana Valley           
 is supported by donations, memorials, fundraisers, and small grants           
 from the community.  Hospice of Tanana Valley is the largest, most            
 comprehensive bereavement program in Alaska.  Ms. Kocsis noted that           
 Hospice of Tanana Valley exceeds the regulations specified in the             
 bill and the National Hospice Organization and Medicare Certified             
  TAPE 97-32, SIDE A                                                           
 Ms. Kocsis urged the committee to take steps to eliminate any                 
 hardships that may be created for volunteer hospices because of               
 this licensing process.                                                       
  BARBARA RICH  said that most of the issues regarding the volunteer           
 hospices had been addressed in the CS before the committee.  Ms.              
 Rich was concerned with the cost this would pose for hospices with            
 limited funds.  If this bill is passed, Ms. Rich hoped that the               
 Department of Health would develop regulations that would be easy             
 to adhere.  The regulations in the bill are lower than required of            
 the hospice in Fairbanks.                                                     
  CHAIRMAN WILKEN  asked Ms. Kocsis to review page 6, lines 9-27 of            
 the CS; would that level of paper work be acceptable.   TINA KOCSIS           
 said that the level specified in the bill is already being exceeded           
 in the Tanana Valley Hospice.  The specifications in the bill are             
  BEN BROWN  clarified that regarding the presence of a medical                
 director at volunteer hospices, Mr. Brown only meant that the bill            
 does not require that of volunteer hospices.  Mr. Brown pointed out           
 that only lines 9-20 on page 6 apply to volunteer hospices.                   
 Number 071                                                                    
  CHARLES QUARRE , President of Hospice of the Central Peninsula,              
 noted that Hospice of the Central Peninsula was a volunteer hospice           
 that serves approximately 20 clients annually.  Hospice of the                
 Central Peninsula is a member and adheres to all the guidelines of            
 the National Hospice Organization.  Hospice of the Central                    
 Peninsula has one part-time director and about 50 volunteers.  Mr.            
 Quarre expressed concern that this legislation would create an                
 additional burden.  Mr. Quarre requested that the volunteer                   
 hospices be deleted from the legislation because all the                      
 requirements under Article 2 are being adhered to.                            
  BEN BROWN  clarified that Article 2 could be deleted or steps can be         
 taken to ensure that the department does not adopt regulations more           
 stringent than specified in the language of the statute.                      
 Furthermore, the department can be prohibited from adopting                   
 regulations and only adopt guidelines or procedures.  Mr. Brown               
 noted that Mr. Larsen who will do the inspections and regulation              
 can speak to this issue.                                                      
  SHELBY LARSEN , Administrator of Health Facilities Licensing &               
 Certification, supported SB 96.  The licensing process is not                 
 burdensome.  There is a two to three page application that must be            
 completed annually.  The licensing process also includes an on site           
 inspection which would be followed by a report.  If the volunteer             
 agencies are already adhering to the standards specified in the               
 bill, the report would be brief.  The purpose of the bill and                 
 subsequent regulations would be to ensure that quality is                     
 maintained in the future.  Oversight is also important; only                  
 minimal oversight occurs with certified hospice organizations.  Mr.           
 Larsen believed that more oversight was necessary.  Mr. Larsen                
 informed everyone that the department has a policy that any                   
 organizations effected by the regulations are involved in order to            
 have input.  It is not the intent of the department to develop                
 regulations that would put hospice organizations out of business.             
 The regulations are developed for minimum standards, quality care,            
 and protection of the clients.  Mr. Larsen stressed that there will           
 not be an annual fee, there has never been an annual fee charged              
 for licensure although that is an option of the department.                   
  CHAIRMAN WILKEN  referred to page 7, line 8 when asking if proof of          
 auto insurance and a valid driver's license were required of other            
 volunteer organizations.   SHELBY LARSEN  did not know.   CHAIRMAN            
 WILKEN  asked Mr. Brown to follow up on that matter.                          
  CHAIRMAN WILKEN  asked Mr. Larsen to provide the committee examples          
 of why this licensure is necessary.   SHELBY LARSEN  said that Alaska         
 has not had any problems.  As resources are shrinking, the health             
 industry is attempting to find resources.  There are organizations            
 that, in an attempt to capture resources, say that hospice care is            
 provided when it is not.  In some areas, as managed care has                  
 developed, hospice-like services may be provided but in a                     
 fragmented manner through the HMOs.  Those are not true hospices.             
 SB 96 would ensure that when an organization says that it provides            
 hospice services that it truly does, not just pieces.  Mr. Larsen             
 said that managed care is creeping into Alaska and this is a                  
 concern for the future.                                                       
  CHAIRMAN WILKEN  held SB 96.  There being no further business before         
 the committee, the meeting was adjourned at 10:53 a.m.                        

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