Legislature(2001 - 2002)
04/02/2001 02:00 PM Senate HES
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* first hearing in first committee of referral
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+ teleconferenced
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ALASKA STATE LEGISLATURE
SENATE HEALTH, EDUCATION & SOCIAL SERVICES COMMITTEE
April 2, 2001
2:00 p.m.
MEMBERS PRESENT
Senator Lyda Green, Chair
Senator Loren Leman, Vice Chair
Senator Gary Wilken
Senator Jerry Ward
MEMBERS ABSENT
Senator Bettye Davis
COMMITTEE CALENDAR
SENATE BILL NO. 155
"An Act relating to the Alaska Commission on Postsecondary
Education and the Alaska Student Loan Corporation; relating to
student financial aid programs and the financing of those programs;
establishing the Alaska Advantage Loan Program and the Alaska
Supplemental Education Loan Program; increasing the bonding
authorization of the Alaska Student Loan Corporation; providing for
liens resulting from a default under AS 14.43 or AS 14.44; relating
to the duties of the recorder regarding those liens; relating to
defaults under the Western Regional Higher Education Compact;
relating to the prohibition on discrimination regarding programs
under AS 14.43; relating to fees for the review of certain
postsecondary institutions; making conforming amendments; and
providing for an effective date."
HEARD AND HELD
SENATE BILL NO. 91
"An Act relating to information and services available to pregnant
women and other persons; and ensuring informed consent before an
abortion may be performed, except in cases of medical emergency."
MOVED CSSB 91(HES) OUT OF COMMITTEE
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 149
"An Act relating to employment incentives for teachers and health
care providers, to reemployment of retired teachers, to loans to
and loan forgiveness for teachers and health care providers, to
awards to teachers, to eligibility for major medical insurance
coverage for beneficiaries of the teachers' retirement system, and
to teacher certificates; and providing for an effective date."
PREVIOUS COMMITTEE ACTION
SB 155 - No previous Senate action.
SB 91 - See HESS minutes dated 3/14/01 and 3/16/01.
SB 149 - No previous Senate action.
WITNESS REGISTER
Diane Barrans
Postsecondary Education Commission
Department of Education & Early Development
3030 Vintage Dr.
Juneau, AK 99801
POSITION STATEMENT: Explained the provisions of SB 155.
Rick Weems
University of Alaska Anchorage
3211 Providence Dr.
Anchorage, AK 99508
POSITION STATEMENT: Supports SB 155.
Sandy Altland
Staff to Senator Ward
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Explained the changes made to CSSB 91(HES).
Dr. Tina DeLapp
University of Alaska Anchorage
13101 Elmore Rd.
Anchorage, AK 99516
POSITION STATEMENT: Supports SB 149.
Debbie Ossiander
Anchorage School Board
PO Box 196650
Anchorage, AK 99519
POSITION STATEMENT: Supports SB 149.
Steve Cathers
Valdez, AK
POSITION STATEMENT: Supports SB 149.
Melissa Hill, Director
Alaska Teacher Placement
University of Alaska Fairbanks
Fairbanks, AK
POSITION STATEMENT: Supports SB 149.
Larraine Derr
Alaska State Hospital & Nursing Home Association
426 Main St.
Juneau, AK 99801
POSITION STATEMENT: Supports SB 149.
Bruce Johnson
Deputy Commissioner
Department of Education &
Early Development
th
801 W 10 St.
Juneau, AK 99801-1894
POSITION STATEMENT: Supports SB 149 but informed the committee of
similar actions taken by the state board of education.
Karen Pearson
Department of Health &
Social Services
PO Box 110601
Juneau, AK 99801-0601
POSITION STATEMENT: Supports SB 149.
Sharon Barton, Director
Division of Personnel
Department of Administration
PO Box 110200
Juneau, AK 99811-0200
POSITION STATEMENT: Supports SB 149 but informed the committee of
other professions that are facing a severe shortage.
ACTION NARRATIVE
TAPE 01-29, SIDE A
Number 001
CHAIRWOMAN LYDA GREEN called the Senate Health, Education & Social
Services Committee meeting to order at 2:00 p.m. Present were
Senators Wilken, Ward and Green. The first order of business to
come before the committee was SB 155.
SB 155-STUDENT LOANS/COMN. ON POSTSECONDARY ED.
MS. DIANE BARRANS, Director of the Alaska Commission on
Postsecondary Education (ACPE), gave the following explanation of
SB 155. Recognizing that the financial status of ACPE and its
financing partner, the student loan corporation, had been
stabilized 18 months ago, ACPE management was challenged by the
board to identify ways to expand its services and increase the
public benefit of those services for Alaskans. Working with the
Commission's team of managers, the ACPE focused on a strategic
recommendation made by the agency's external audit firm of KPMG
Peat Marwick and developed the Alaska Advantage Program. Over the
last 10 months, it has analyzed customers' needs and expectations.
That has included extensive communication with administrators at
the four institutions who collectively administer financial aid for
approximately 40 percent of ACPE's borrowing customers. With its
outreach effort, ACPE has better identified the needs of its
customers and the ACPE is better informed to serve these customers
now than ever before.
To that end, SB 155 has been introduced by the Governor to
establish the Alaska Advantage Program. The program will return
meaningful benefits and dividends to its stakeholder groups:
students; parents; higher education institutions in Alaska;
legislators; employers; and bond holders. SB 155 sets out a
statutory framework for the ACPE and the corporation to develop and
implement the premiere educational loan program in the United
States by and for Alaskans. The statutory changes made by the bill
will result in lower cost educational loans in Alaska and other
improvements to borrowers' loan terms. The ACPE's success in
marketing such a program will be one means of helping Alaskans
fight the high cost of postsecondary education and hopefully change
their perception that education is unaffordable. SB 155 will allow
the ACPE to facilitate these changes without putting at risk the
financial strength of the corporation. This initiative will
improve and expand services to Alaskans and assist the institutions
in Alaska in attracting and retaining new students.
For borrowers, the Alaska Advantage Program will guarantee the
lowest possible borrowing rates. It will improve aid packaging and
delivery by creating a one-stop shopping format. It ensures
simultaneous grant and loan application. It approves and expands
the borrowers deferment and repayment options and it provides an
opportunity for debt consolidation in Alaska with an Alaska lender.
For institutional partners, through ASL-net, the Commission's
internet portal, Alaska Advantage provides a recruitment and
retention tool through beneficial interest terms. It streamlines
and improves financial aid delivery, easing the administrative
burden. It eliminates unnecessary program differences to simplify
administration of these programs for staff and it will enhance loan
product comparisons by students and their families. It also
provides specific financial awards for borrowers remaining in or
returning to Alaska and it enhances default management support.
For the corporation, the Alaska Advantage Program will reduce the
risk through the federal guarantee, hopefully resulting in an
improved bond rating to AAA and further bond cost reductions. The
federal interest subsidies will improve cash flow and it will
eliminate 98 percent of the loss on the federally underwritten
loans due to borrowers' default, death, disability or bankruptcy.
In time, ACPE expects these changes to allow for additional Alaska
Advantage benefits such as upfront interest reductions, a rate
reduction for borrowers who remain in or return to Alaska,
repayment rewards, bank payment rewards, and other incentives for
good borrower behavior. The results achieved by the ACPE and the
corporation in recent years have meant a significant improvement in
both the program finances and servicing. These results could not
have been achieved without broad support of the Administration, the
Legislature, participating institutions and Alaska students.
SB 155 will enable the ACPE to convert these successes into
positive momentum and raise its services to the next level.
Continued and substantial improvement is only possible through
proposed integration of the programmatic and financial strengths of
federal and state student services. The timeline reflects an
extremely aggressive schedule as ACPE will seek to implement this
servicing model for the 2002-2003 year.
MS. BARRANS asked for expedited consideration and passage of SB
155, which will permit the ACPE to immediately direct 100 percent
of its resources to the planning, marketing and other
implementation activities. Success is feasible if we begin in May
of this year, but the process cannot begin until the statutory
structure is in place.
SENATOR WILKEN asked Ms. Barrans if she could review for the
committee the projected income that ACPE expects to make with the
passage of SB 155. He also asked Ms. Barrans to inform the
committee of the amount of delinquent loans that have been paid
through permanent fund dividend collections.
Number 689
MS. BARRANS directed the committee's attention to the fiscal note,
which shows a positive change in revenues. By 2003, ACPE expects to
have a $4.7 million increase in net income, with that amount
continuing as the program evolves. The fiscal note was estimated
with all things remaining as they are. However, ACPE intends to
take the net gain and roll it back into the loan products
themselves. ACPE would like to offer below-market rate loans.
CHAIRWOMAN GREEN asked if the savings from the projected increase
would apply to borrowers in the future or whether they would have
any retroactive impact.
MS. BARRANS said the savings shown on the fiscal note are specific
to the federally underwritten law. She noted regarding the
permanent fund dividend collections for bad debt, ACPE recovered
$13 million this year and $12 million last year.
Number 846
SENATOR LEMAN pointed out that the fiscal note contains funding for
four new employees. He asked her to address, to the Senate Finance
Committee, whether four new employees are necessary and or whether
contracting out some of that work would be a better approach.
CHAIRWOMAN GREEN announced that she will hold the bill until
Wednesday to provide committee members the opportunity to get any
other questions answered.
MS. BARRANS informed the committee that the fiscal note will be
revised because the numbers used are consistent with the current
default rate; that default rate is expected to decrease with the
new program model.
CHAIRWOMAN GREEN took a brief at-ease and then continued taking
public testimony on SB 155.
MR. RICK WEEMS, University of Alaska Anchorage (UAA) finance
officer, stated support for SB 155 and said that UAA's partnership
with ACPE is providing great services for students.
There being no further testimony or questions on SB 155, the
committee took up SB 91.
SB 91-ABORTION: INFORMED CONSENT;INFORMATION
SENATOR WARD moved to adopt a proposed committee substitute
(Version C) to SB 91 as the working document of the committee.
There being no objection, the motion carried.
MS. SANDY ALTLAND, legislative aide to Senator Ward, sponsor of SB
91, explained the changes to the committee substitute. On page 3,
line 9, a new section (c) was inserted to specify where the
informational pamphlet should be distributed, that it should be
free, and that the Department of Health and Social Services should
advertise the availability of the pamphlet.
SENATOR WARD stated that under current law, information about
planned parenthood must be distributed in certain locations. The
new section in CSSB 91(HES) will place this pamphlet next to those.
SENATOR LEMAN informed the committee that he plans to propose an
amendment to this bill in the Senate Finance Committee.
There being no testimony or questions, SENATOR WARD moved CSSB
91(HES) from committee with individual recommendations. There
being no objection, the motion carried.
SB 149 - TEACHER/HEALTH CARE PROVIDER INCENTIVES
CHAIRWOMAN GREEN asked Senator Leman, the sponsor of SB 149, to
present the bill.
SENATOR LEMAN said he introduced SB 149 because of the shortage of
teachers and health care providers, most noticeably of nurses, in
Alaska. To address this problem, he believes the state needs to
provide incentives to reverse this trend. The University of Alaska
(UA) is doing a capable job of filling some of the shortages, but
it is unable to fill them all so Alaska must attract professionals
from outside of the state.
SB 149 attracts newly trained people, it promotes retention of the
existing workforce, and it will therefore attract retirees back
into the workforce. It provides financial incentives to motivate
entry-level teachers and health care providers to the state. It
has a partial loan assumption element that provides up to $10,000
in state-paid loan payment support. In addition, it contains a
loan forgiveness provision for teachers in rural areas. He
believes that provision should be expanded to include certain
teachers in urban areas.
SENATOR LEMAN explained that the bill also targets employed
professionals by increasing medical benefits for those teachers who
work 25 years instead of 20. For the additional five years of
work, their coverage would increase to 100 percent upon retirement.
Another provision of the bill recognizes out-of-state teaching
certificates and provides for a teaching excellence award program.
That program provides a $1500 award to up to 20 percent of the
teachers in Alaska school districts. The districts would determine
the methods to decide who the awards will go to. He expects that
program to motivate teachers to improve our education system. The
bill contains a fiscal note, which he expects the committee to work
on to fit within the budget gap.
SENATOR LEMAN pointed out that under SB 149, retired teachers would
be able to come back into the system and work. They could continue
to receive benefits but, if they chose not to, they could work at a
higher salary. He offered to go into more detail on that section
if necessary.
Number 1501
SENATOR GREEN asked if the Department of Law has issued an attorney
general's opinion on the question of whether it is discriminator to
grant forgiveness on student loans for a certain segment of the
population.
SENATOR LEMAN stated that SB 149 has discrimination built into it.
He believes the question is whether the discrimination is
appropriate and, in his opinion, it is. He said he would welcome
testimony from the Department of Education and Early Development
and the assistant attorney general who represents that department
on that question.
SENATOR WARD commented that special housing loans were given to
police officers in the Mountainview area of Anchorage. He asked
Senator Leman whether he considered offering a further subsidized
housing loan program through the Alaska Housing Finance Corporation
to provide incentive to teachers to move to certain areas.
SENATOR LEMAN thought that is a good idea and said he sees the bill
as a work in progress. He recognizes that the bill has a large
fiscal note and that it will have to be constrained.
SENATOR WARD asked the committee to consider a housing subsidy and
thought the police program was subsidized with federal money.
SENATOR WILKEN asked when the ACPE will provide a fiscal note.
CHAIRWOMAN GREEN said she would request one.
SENATOR WILKEN asked whether the Department of Community and
Economic Development is the appropriate agency to administer the
loan program [page 9, line 14].
SENATOR LEMAN said that provision refers to the grants that are
given directly to whoever made the loan.
CHAIRWOMAN GREEN asked participants to keep their testimony brief
to allow everyone time to testify.
Number 1713
DR. TINA DELAPP, UAA School of Nursing, said she is pleased to see
the addition of health care providers to the bill as the greatest
shortage of workers in Alaska is in the category of registered
nurses. Alaska has a severe shortage of registered nurses, and a
substantial number of the existing nurses in the workforce is
expected to retire within 15 years. The same shortage exists in
the other 49 states. In the past, Alaska has been able to rely on
recruitment from other jurisdictions; it can no longer do that so
it is crucial to retain the nurses who have been educated in
Alaska. Given the heavy indebtedness that most nursing students
have accumulated at the time of graduation, forgiving a portion of
that indebtedness will give many a powerful incentive to remain in
the state. Nursing is a physically, emotionally and intellectually
demanding profession and those demands increase in times of
shortage. The burnout rate is high. It is not uncommon for a
recent graduate to be overcome by the demands and elect to seek
employment in a less demanding field. Extending the rate of loan
repayment over a five year period may be useful in keeping nurses
actively employed in the field until they have had sufficient time
to gain experience and comfort. The shortage in Alaska is most
severe in rural areas therefore she applauds the provision that
adds an incentive for individuals who elect to practice in rural
areas, however she does not believe that was intended to be based
on a cumulative GPA. Improving the quality of preventive, acute
and long term health care services will ultimately reduce costs and
provide economic advantages to communities that seek to attract and
retain workers to fill jobs both in and outside of the health care
arena. She believes SB 149 will attract and increase the retention
of nurses in Alaska, and especially in rural areas of the state.
She suggested providing more continuing education opportunities in
rural Alaska.
Number 1879
MS. DEBBIE OSSIANDER, a member of the Anchorage School Board,
expressed enthusiastic support for SB 149. This bill will go a
long way toward some of the challenges that public schools are
facing. Sections 3 and 4 are particularly important. The five
year timeframe on reciprocity of teacher certification is
particularly helpful. Additionally, the employment of retired
teachers is a provision that the Anchorage School District, and
others, has pushed for several years. The Anchorage School
District would like to see that provision apply to hiring teachers
in areas of shortage. The Anchorage School District is also
appreciative of being able to determine areas of shortage; that bit
of local flexibility will go along way towards benefiting it.
MS. OSSIANDER said she is confused about Sections 8 and 10,
regarding the loan forgiveness provisions. Section 10 would be
particularly helpful for urban Alaskan school districts. She also
appreciates the teacher award program. Overall, the Anchorage
School Board supports SB 149.
Number 2005
MR. STEVE CATHERS from Valdez testified on his own behalf. He
finds SB 149 to be a bold and creative bill that provides a number
of strategies to attract teachers to the state. This bill
addresses all teachers: new teachers through loan forgiveness
provisions; retired teachers by not interrupting their retirement
benefits; and it provides for teacher certification reciprocity.
He expressed concern about whether a teacher who, through
reciprocity, has received a five year certificate can reapply for a
provisional certificate when the five years is up. Regarding the
teacher award program, the State of Arizona has proven that
objective criteria for awarding incentives can be implemented. The
superintendents have discussed and strongly support the possibility
of eliminating the Tier II designation from the teachers retirement
system. SB 149 will certainly be of use to school districts but
timing is critical as the job fair will occur soon.
MS. MELISSA HILL, Alaska Teacher Placement director, expressed
support for SB 149, especially for the certification reciprocity
provision. The certification process in Alaska is very expensive.
She asked that the Institutional Recommendation Form be reviewed by
the teacher certification office. She also expressed support for
reemployment of retired members and for the loan forgiveness
provision. Other states have offered signing bonuses that do not
necessarily lead to higher retention rates. She recommended
allowing school districts in urban areas to use these incentives to
hire staff in high demand positions.
Number 2308
MS. LARRAINE DERR, representing the Alaska State Hospital and
Nursing Home Association, said she is speaking specifically to the
shortage of nurses although there is a shortage in many of the
health care provider areas. Of 33 categories of health care
providers that the Department of Labor keeps track of, 5400
vacancies are projected to occur within the next 10 years,
according to a 1998 study. Since 1998, 580 vacancies per year have
been occurring. By 2008, Alaska will need more than 1300
registered nurses (RNs) and 150 more licensed practical nurses
(LPNs). Currently the UA enrolls 60 students per year in its RN
program and 30 in the LPN program. About 15 percent of LPNs plan
to leave that field in the next five years. That extrapolates to
an additional 550 vacancies or more than 100 per year. The UA is
adding new programs but additional students must be attracted into
these areas. The legislature can help by supporting UA's budget
and by supporting SB 149. This is not an Alaska issue alone; the
American Hospital Association has named workforce development as
its number one priority in 2001. The problem is nationwide. This
legislation will help to attract students to Alaska.
TAPE 01-29, Side B
MS. DIANE BARRANS, Executive Director of the Alaska Commission on
Postsecondary Education, said she looked at the forgiveness
provision on state student loans and the provision that establishes
a program within the Department of Community and Economic
Development. The bill contains windows of opportunity for people
who have borrowed student loans from July 1, 2001 through June 30,
2004. However, this bill does not provide tools that can be used
to recruit this year. The loan forgiveness provision does not
apply to any existing loans; it will begin to apply to loans
borrowed this next year. The sunset provision will provide for a
periodic review to see whether the loan forgiveness provision would
remain.
SENATOR LEMAN asked if that window of opportunity could be changed
by making the date earlier.
MS. BARRANS said it could. She also pointed out the ACPE has not
provided a fiscal note yet because there is some uncertainty about
the health care provider definition and who the benefits would be
extended to. The definition is very broad; 14 health care
professions are licensed by the state and could fit the definition
of the bill. She stated without further guidance from the sponsor,
the ACPE will craft a fiscal note for the broadest interpretation
of that definition.
CHAIRWOMAN GREEN asked Senator Leman to discuss that definition
with Ms. Barrans.
Number 2244
DR. BRUCE JOHNSON, Deputy Commissioner of the Department of
Education, commended Senators Leman and Davis for their efforts in
trying to address the teacher shortage issue. He noted the state
board of education passed, this last Friday, a provisional two-year
certificate, which is similar to what is outlined in the bill. He
asked the committee to review the provisional certification to
determine whether that will be sufficient.
SENATOR LEMAN asked if the state board has the statutory authority
to make that change.
DR. JOHNSON said the board does believe it has that authority.
MS. KAREN PEARSON, Director of Public Health, DHSS, commended
Senator Leman for including health care providers in SB 149,
especially mental health care providers. She assured the committee
that certain areas in Alaska are experiencing shortages in every
type of health care provider. She pointed out the Denali
Commission has provided funding to improve health facilities in
rural Alaska. SB 149 will help provide the staff needed to make
sure those facilities are utilized and that services can be
delivered.
CHAIRWOMAN GREEN asked Ms. Pearson to describe the Denali
Commission's program.
MS. PEARSON said that funding will be coming through the Denali
Commission to address the need for primary care health facilities,
especially in rural Alaska. The funding will be for both larger
clinics that will serve populations of over 750, and for small
clinics. There is separate funding for the two types so they will
not be competing against each other. There has been extensive work
done on looking at where the needs are, where the sustainability
exists, and to come up with technical assistance for communities
with high needs but little capacity to do their own development.
She reiterated Ms. Barran's concern that the prospective dates in
SB 149 will delay, for about two years, any ability to recruit
based on loan forgiveness.
Number 2082
SENATOR LEMAN said he agrees the dates should be changed so that
the bill has a more immediate impact. He expressed concern that
the fiscal impact of SB 149 has to be constrained so he asked Ms.
Pearson to work with him to determine where the incentives need to
be provided among the health care professions.
MS. PEARSON agreed to do so.
MS. SHARON BARTON, Director of the Division of Personnel,
Department of Administration, informed the committee that the
division is concerned about recruitment and retention programs on a
statewide level. The division appreciates the bill's focus on two
critical areas but the shortage problem is occurring across state
government and many mission-critical jobs in all agencies need
similar incentives. She provided the committee with a chart that
shows that all state departments are sharing in this problem. The
average age of a new hire in state government is 38 years old and
the average age of state employees is 44. The state has invested
in 12 years of education for its youth. Anything that can be done
to encourage those college students to return to these jobs will be
in the state's best interest. State government will be losing most
of its most qualified people in the next five to seven years so it
needs incentives to keep them in the workforce longer.
Regarding the "double dipping" issue, MS. BARTON said the provision
in this bill does not add cost to the retirement program. The
division has no compunction, on the other hand, of hiring "double
dippers." Furthermore, other employers do not mind hiring state
government retirees so the state government is cutting itself off
from keeping some of its best qualified people in its workforce
without providing an incentive to remain. The problem is not
always rural in these other job classes. The division has been
surveying applicants for state government jobs since last
September. Out of 1800 responders to the survey, only 130 were in
the 22 to 24 year old age group. She urged the committee to
consider the rest of the workforce as it considers the provisions
in SB 149.
CHAIRWOMAN GREEN asked what other specific professions are
experiencing a shortage.
MS. BARTON said engineers, accountants and other higher level
administrative positions, biologists and other natural resource and
scientific job classes, among others.
SENATOR LEMAN pointed out that he wanted the provisions of SB 149
to also apply to engineers but he did not want the bill to be too
self serving. He asked if Ms. Barton has a similar age
distribution chart from five or ten years ago so that the committee
can get a better picture of the state government workforce.
MS. BARTON said the division will be working on that data and it
will take more of a manual effort to get those figures but she will
provide the committee with a copy.
SENATOR LEMAN thought a measurable change will be evident over the
last ten years.
CHAIRWOMAN GREEN suspected the problem is nationwide.
SENATOR WARD asked Senator Leman to contact the AHFC to explore the
possibility of offering low-interest housing loans as an incentive.
There being no further business to come before the committee,
CHAIRWOMAN GREEN announced the committee will hear an overview on
Medicaid on Wednesday and that she has requested DHSS to provide
the committee with information on the costs of the recommendations
made by the Long Term Care Task Force. She then adjourned the
meeting at 3:15 p.m.
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