Legislature(1997 - 1998)
03/21/1997 09:05 AM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE HEALTH, EDUCATION & SOCIAL SERVICES COMMITTEE 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 injury 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 education 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 available. 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 influence. 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 regressive. 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: Delete " 1997 " Insert " 1995 " Page 4, line 7: Delete " 50 " Insert " 70 " Page 4, line 10 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 project; or (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 01.10.070(c)." 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 abuse. 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 Mat-Su. 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 Alaska. 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 ordered. 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 Standards. 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 fine. 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.