Legislature(2011 - 2012)BELTZ 105 (TSBldg)

03/08/2011 02:00 PM LABOR & COMMERCE

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Heard & Held
Note:Active Bill is Sponsor Substitute for SB 51
Heard & Held
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Bill Postponed To March 17
<Bill Hearing Postponed>
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                         March 8, 2011                                                                                          
                           2:00 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Dennis Egan, Chair                                                                                                      
Senator Joe Paskvan, Vice Chair                                                                                                 
Senator Linda Menard                                                                                                            
Senator Bettye Davis                                                                                                            
Senator Cathy Giessel                                                                                                           
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
SENATE BILL NO. 70                                                                                                              
"An  Act establishing  the Alaska  Health  Benefit Exchange;  and                                                               
providing for an effective date."                                                                                               
     - BILL HEARING POSTPONED TO MARCH 17                                                                                       
SENATE BILL NO. 51                                                                                                              
"An  Act  relating to  the  operation  of vending  facilities  on                                                               
public property."                                                                                                               
     - HEARD & HELD                                                                                                             
SENATE BILL NO. 81                                                                                                              
"An Act establishing  as a standard for the  procurement of group                                                               
life  and health  insurance for  retirement  systems for  certain                                                               
public employees  a requirement  that dependent  coverage medical                                                               
benefits  provided to  the systems'  retiree members  may not  be                                                               
less  than dependent  coverage medical  benefits provided  to the                                                               
systems' active members."                                                                                                       
     - HEARD & HELD                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB  51                                                                                                                  
SHORT TITLE: STATE VENDING LICENSES                                                                                             
SPONSOR(s): SENATOR(s) DAVIS                                                                                                    
01/19/11       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/19/11       (S)       L&C, FIN                                                                                               
02/16/11       (S)       SPONSOR SUBSTITUTE INTRODUCED-REFERRALS                                                                
02/16/11       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/16/11       (S)       L&C, FIN                                                                                               
03/08/11       (S)       L&C AT 2:00 PM BELTZ 105 (TSBldg)                                                                      
BILL: SB  81                                                                                                                  
SHORT TITLE: PUBLIC RETIREE MED. BENEFITS: DEPENDENTS                                                                           
SPONSOR(s): SENATOR(s) DAVIS                                                                                                    
02/04/11       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/04/11       (S)       L&C, FIN                                                                                               
02/22/11       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/22/11       (S)       <Bill Hearing Postponed>                                                                               
03/08/11       (S)       L&C AT 2:00 PM BELTZ 105 (TSBldg)                                                                      
WITNESS REGISTER                                                                                                              
TOM OBERMEYER                                                                                                                   
Staff to Senator Davis                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Commented on SB 51 and SB 81 for the                                                                      
PAULA SCAVERA, Legislative Liaison and Special Assistant                                                                        
Department of Labor and Workforce Development (DOLWD)                                                                           
Alaska State Legislature                                                                                                        
POSITION STATEMENT: Commented on possible legal issues with SB                                                                
CHERYL WALSH, Director                                                                                                          
Division of Vocational Rehabilitation                                                                                           
Department of Labor and Workforce Development (DOLWD)                                                                           
Juneau, AK                                                                                                                      
POSITION STATEMENT: Answered questions on SB 51.                                                                              
TERRY BANNISTER, Attorney                                                                                                       
Legislative Legal Services                                                                                                      
Legislative Affairs Agency                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Answered questions as drafter of SB 51.                                                                   
ANMEI GOLDSMITH, Assistant Attorney General                                                                                     
Department of Law                                                                                                               
Juneau, AK                                                                                                                      
POSITION STATEMENT: Answered questions about SB 51.                                                                           
JAMES SWARTZ, Executive Vice President                                                                                          
Alaska Independent Blind                                                                                                        
Anchorage, AK                                                                                                                   
POSITION STATEMENT: Supported SB 51.                                                                                          
LYNNE KORAL, President                                                                                                          
Alaska Independent Blind                                                                                                        
Anchorage, AK                                                                                                                   
POSITION STATEMENT: Supported SB 51.                                                                                          
SANDY SANDERSON                                                                                                                 
Alaska Independent Blind                                                                                                        
Anchorage, AK                                                                                                                   
POSITION STATEMENT: Supported SB 51.                                                                                          
BOB DOLL, President                                                                                                             
Retired Public Employees of Alaska (RPEA)                                                                                       
Juneau, AK                                                                                                                      
POSITION STATEMENT: Supported SB 81.                                                                                          
MARIE DARLIN, Legislative Task Force                                                                                            
AARP Juneau                                                                                                                     
Juneau, AK                                                                                                                      
POSITION STATEMENT: Supported SB 81.                                                                                          
DAN WAYNE, Attorney                                                                                                             
Department of Law                                                                                                               
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Answered questions about SB 81.                                                                           
JIM PUCKETT, Acting Director                                                                                                    
Division of Retirement and Benefits                                                                                             
Department of Administration (DOA)                                                                                              
Juneau, AK                                                                                                                      
POSITION STATEMENT: Answered questions about SB 81.                                                                           
ACTION NARRATIVE                                                                                                              
2:00:29 PM                                                                                                                    
CHAIR DENNIS EGAN called the Senate Labor and Commerce Standing                                                               
Committee meeting to order at 2:00 p.m. Present at the call to                                                                  
order were Senators Giessel, Davis, Paskvan, Menard, and Egan.                                                                  
CHAIR EGAN announced that SB 70  was postponed until the March 17                                                               
                SSSB  51-STATE VENDING LICENSES                                                                             
2:01:31 PM                                                                                                                    
CHAIR EGAN announced SSSB 51 to be up for consideration.                                                                        
SENATOR DAVIS,  sponsor of  SB 51,  said a  number of  people had                                                               
approached  her  because at  one  time  blind people  were  given                                                               
preference in  setting up vending  businesses on state  and other                                                               
public properties, but at some  point other people were given the                                                               
same  preference  making it  hard  for  the  blind to  get  those                                                               
2:02:29 PM                                                                                                                    
TOM OBERMEYER,  staff to  Senator Davis, sponsor  of SB  51, said                                                               
this bill restores first priority  to blind persons for getting a                                                               
contract to operate a vending  facility on state and other public                                                               
property.  This bill  amends the  Alaska  Chance Act  of 1976  to                                                               
require that  the Division of Vocational  Rehabilitation Business                                                               
Enterprise Program  provide the  same first-priority to  blind on                                                               
state  and other  public property  like what  is done  on federal                                                               
property, and enforced under the Randolph-Sheppard Act of 1936.                                                                 
He  explained that  the Alaska  Chance Act,  for the  first time,                                                               
added disabled  persons to the blind  individuals' preference for                                                               
vending  licenses  on  public  facilities.  This  loss  of  first                                                               
priority and  expansion of beneficiaries has  thwarted the spirit                                                               
and letter  of the Randolph-Sheppard Act  resulting in decreasing                                                               
vending  opportunities  for  blind   merchants  in  Alaska,  thus                                                               
exacerbating  their already  high  unemployment  rates among  all                                                               
types  and  severities  of  the   disabled  and  in  the  general                                                               
SB 51  recognizes that  disabled persons do  not suffer  the same                                                               
degree of impairment  and unemployment as the  blind, bringing up                                                               
the  question of  equal protection  under the  law. Although  the                                                               
state  has combined  management  and  training opportunities  for                                                               
both  blind  and  other  persons   with  disabilities  under  the                                                               
Business  Enterprise Program,  this  bill  requires giving  first                                                               
priority to  the blind  for vending  contracts on  state, federal                                                               
and other public property.                                                                                                      
MR.  OBERMEYER said  the bill  has  a new  definition of  "public                                                               
property," as  well, and  clarified that  this language  does not                                                               
prevent people  with other  disabilities from  getting preference                                                               
after priority to the blind in these matters.                                                                                   
He said SB 51 comports  with original legislative intent prior to                                                               
the 1974  and 2006 changes  that added persons  with disabilities                                                               
and   severe  disabilities   to  the   same  priority   as  blind                                                               
individuals  for   licenses  on  vending  facilities   on  public                                                               
property  by  giving  first  priority   to  the  blind  under  AS                                                               
23.15.100.  Further, it  requires  that the  division attempt  to                                                               
find and  notify blind persons  of vending opportunities  as they                                                               
arise on  public property. These  public properties  may include,                                                               
among  other  things, court  houses,  military  bases, state  and                                                               
federal office buildings and other public properties.                                                                           
2:05:14 PM                                                                                                                    
He  explained  that  typically,  blind  individuals  who  receive                                                               
Randolph-Sheppard contracts  act as managers of  large vending or                                                               
cafeteria   facilities    subcontracting   with    food   service                                                               
organizations to provide meals and/or  vending services on a day-                                                               
to-day  basis.   They  may   also  independently   operate  lobby                                                               
concession stands or vending machine banks.                                                                                     
MR. OBERMEYER  explained that in October  2009, Alaska's Business                                                               
Enterprise  Program  had  only six  sites  operating  in  federal                                                               
facilities  under Randolph-Sheppard  and six  sites operating  in                                                               
state facilities  under the Chance  Act. This bill  would greatly                                                               
expand opportunities for employment  in vending locations for the                                                               
blind by amending the word  "property" to include the property of                                                               
municipalities and school districts beyond the 12 locations.                                                                    
MR. OBERMEYER provided the sectional analysis as follows:                                                                       
2:07:20 PM                                                                                                                    
Section  1:  amends   powers  and  duties  of   the  Division  of                                                               
Vocational Rehabilitation. It removes  references to persons with                                                               
severe  disabilities   from  the  provisions  dealing   with  the                                                               
operating of vending facilities on public property.                                                                             
Section  2:  directs  the  agency  to issue  a  license  for  the                                                               
operation  of  vending facilities  on  public  property to  blind                                                               
persons   who   meet   certain   criteria,   including   criteria                                                               
established by agency regulations.  It requires these regulations                                                               
to provide  blind persons with  first priority for a  contract to                                                               
operate a vending facility on public property.                                                                                  
Section  3:  adds new  subsections  to  the  new section  on  the                                                               
issuance of licenses for vending facilities on public property.                                                                 
Sec. 23.15.133(c):  allows the agency  to contract with  a person                                                               
who is not  blind to operate a vending facility  until the agency                                                               
can locate  a blind person  who qualifies to operate  the vending                                                               
Sec.  23.15.150(d): says  that when  there  is a  vacancy in  the                                                               
operation of  a vending facility  on state, municipal,  or school                                                               
district property  it requires the  agency to attempt  to contact                                                               
blind persons directly about operating  it and directs the agency                                                               
to  work with  private organizations  to contract  blind persons.                                                               
This  requirement  is  in  addition   to  any  other  procurement                                                               
requirements of AS 36.30 (the  State Procurement Code). Newspaper                                                               
advertising is not sufficient.                                                                                                  
Sec.  23.15.133(e): allows  a blind  person  operating a  vending                                                               
facility  to  operate  another vending  facility  if  the  agency                                                               
cannot  find  a  blind  person   to  operate  the  other  vending                                                               
Section   4:  deletes   a  reference   to  persons   with  severe                                                               
disabilities  from a  provision  relating to  hearings on  agency                                                               
actions that relate to vending facilities.                                                                                      
Section  5: amends  the definition  of "licensee"  to remove  the                                                               
reference to a person with a severe disability.                                                                                 
Section 6: amends the definition  of "public property" to include                                                               
the  property of  municipalities  and school  districts which  is                                                               
what caused the sponsor substitute.                                                                                             
Section 7: adds a definition of "school district."                                                                              
Section  8: repeals  the section  relating to  vending facilities                                                               
operated by persons with severe disabilities.                                                                                   
2:09:46 PM                                                                                                                    
Section 9:  indicates that  the Act  applies to  vending facility                                                               
licenses issues  and vending facility  contracts entered  into on                                                               
or after the effective date of this Act.                                                                                        
Section  10: states  that  the  Act does  not  affect a  contract                                                               
entered into before the effective date of this Act.                                                                             
MR. OBERMEYER noted that SSSB 51  has a zero fiscal note and that                                                               
an  accompanying  memorandum  from Terry  Bannister,  Legislative                                                               
Council, explains why she didn't  see an equal protection problem                                                               
with removing the "other people  with disabilities" from this Act                                                               
in order  to give  priority to  the blind since  the issue  is an                                                               
economic matter.                                                                                                                
CHAIR EGAN said  he intended to hold SSSB 51  for another hearing                                                               
and asked if the committee had questions.                                                                                       
SENATOR  MENARD  asked  if  a  blind person  also  had  a  severe                                                               
disability would  that qualify  him to  have notification  for an                                                               
available vending facility.                                                                                                     
MR. OBERMEYER  replied that the  phrase "severe  disabilities" is                                                               
being deleted  and in  her example the  blind person  would still                                                               
get priority whether he had other severe disabilities or not.                                                                   
2:12:15 PM                                                                                                                    
PAULA  SCAVERA,   Legislative  Liaison  and   Special  Assistant,                                                               
Department of Labor and Workforce  Development (DOLWD), said that                                                               
Assistant Attorney General Anmei Goldsmith  was on line to answer                                                               
questions about some legal issues  with the bill and Cheryl Walsh                                                               
was available to discuss the way the program runs now.                                                                          
CHERYL  WALSH, Director,  Division of  Vocational Rehabilitation,                                                               
Department of  Labor and Workforce Development  (DOLWD), said she                                                               
was available for questions.                                                                                                    
2:13:53 PM                                                                                                                    
CHAIR EGAN asked that someone  from the Department of Law explain                                                               
the problems they have with the legislation.                                                                                    
TERRY   BANNISTER,   Attorney,    Legislative   Legal   Services,                                                               
Legislative Affairs Agency, was the  drafter of SB 51 and related                                                               
that at  first she  thought it had  an equal  protection problem,                                                               
but she  found a  couple of cases  that suggested  otherwise, and                                                               
she didn't  think there was  an equal protection problem  at this                                                               
ANMEI GOLDSMITH,  Assistant Attorney General, Department  of Law,                                                               
said she  saw the same  equal protection problems under  both the                                                               
federal  and  the  state  constitutions,   and  agreed  with  Mr.                                                               
Obermeyer  that the  scrutiny  would probably  be  at the  lowest                                                               
level because  it's about an  economic interest. She  thought the                                                               
bill potentially  invites a challenge  under equal  protection or                                                               
due process,  but how the State  or the U.S. Supreme  Court would                                                               
deal with  such a challenge  was impossible  for her to  say. The                                                               
state scrutiny  would be  substantial relationship  between means                                                               
and ends and the federal scrutiny would be rational review.                                                                     
SENATOR GIESSEL  referred to Ms. Bannister's  memorandum and said                                                               
while she initially  thought there was an  equal protection issue                                                               
regarding item  1 she  had determined there  was not.  The second                                                               
question  pertains to  item  number 2  -  direct notification  of                                                               
blind persons. Ms. Bannister posed  two questions in her memo and                                                               
she asked what the answers were or  if they were to come from the                                                               
Division of Vocational Rehabilitation.                                                                                          
MS. BANNISTER responded  that she had addressed  the questions to                                                               
the Senator and didn't know the answers.                                                                                        
2:18:45 PM                                                                                                                    
SENATOR  PASKVAN said  he understood  that  both attorneys  agree                                                               
that  the  equal  protection  law would  be  subject  to  minimal                                                               
scrutiny under either federal or  state analysis and asked if the                                                               
committee  should support  the sponsor  statement  that says  the                                                               
blind  are  dissimilarly  situated  compared  to  other  disabled                                                               
persons in order  to potentially survive any  legal challenge. He                                                               
asked  if   there  is  an   equal  protection   argument  between                                                               
categories  of  blind  people  compared  to  other  disadvantaged                                                               
MS. BANNISTER replied  that it's always good to  state reasons so                                                               
the meaning is clearer to the court.                                                                                            
2:21:33 PM                                                                                                                    
MS. SCAVERA asked Ms. Walsh to explain the existing program.                                                                    
MS.  WALSH said  it is  a complex  program and  pointed out  that                                                               
individuals who  are blind already  have first priority  and that                                                               
is how  the program currently  operates. She thought  a challenge                                                               
had been made that they don't  operate it in that manner, but she                                                               
didn't know the particulars.                                                                                                    
SENATOR  PASKVAN asked  if blind  people should,  as an  economic                                                               
matter, continue receiving that first priority.                                                                                 
MS. WALSH  replied that she  didn't feel comfortable  making that                                                               
decision, because in the programs  she administers she represents                                                               
all people  with disabilities. The  feds have a priority  for the                                                               
blind on  their six  properties and  state statute  allows people                                                               
with significant  disabilities, but blind individuals  still have                                                               
first priority.                                                                                                                 
SENATOR  PASKVAN asked  if  she understands  the  support at  the                                                               
federal level for the establishment of that priority.                                                                           
MS. WALSH replied  that the priority goes back to  the 1930s when                                                               
blind people,  in particular, had  a dissimilar advantage  in the                                                               
SENATOR  MENARD  asked if  she  felt  that current  statutes  are                                                               
sensitive to the blind.                                                                                                         
MS. WALSH  replied that she puts  forth every effort to  make the                                                               
opportunities available  to the  blind first. The  priority issue                                                               
sometimes comes up  when an individual with a  current site wants                                                               
to  take another  site because  no other  blind person  wants it,                                                               
excluding  other   disabled  people   who  don't   have  anything                                                               
available to  them. This is where  hairs get split about  who has                                                               
first  priority,  because  she  limits  that  individual  to  his                                                               
particular site.                                                                                                                
SENATOR  MENARD said  language on  page  2, line  22, states  the                                                               
state  will provide  the training  and  supervision necessary  to                                                               
enable blind and  severely disabled persons to  buy the equipment                                                               
and initial  stock necessary to  operate vending  facilities, and                                                               
asked  if that  has  a  cap. Does  the  fiscal  note reflect  any                                                               
ongoing  equipment replacement  costs and  maybe even  technology                                                               
MS. WALSH replied  that the funds for the  program come primarily                                                               
as  a set  aside that  vendors use  to feed  money back  into the                                                               
program,  so the  department wouldn't  see any  additional costs.                                                               
She explained that the department  provides the initial stock and                                                               
equipment for a  site and those generated monies go  into the set                                                               
aside to continue the program.                                                                                                  
2:26:49 PM                                                                                                                    
SENATOR GIESSEL  asked if the  list of blind people  is available                                                               
or if it is confidential.                                                                                                       
MS. WALSH  replied that  the division  doesn't maintain  lists of                                                               
people, but they  know the people they are  currently serving and                                                               
the disabilities that they have.  These people work together with                                                               
their counselors to determine an  appropriate vocational goal and                                                               
sometimes that  would include entry into  the Business Enterprise                                                               
Program. Two people are currently  in training to become licensed                                                               
vendors, she said.                                                                                                              
Because a client  becomes a business owner, she  explained, he or                                                               
she has  to have an  entrepreneurial spirit and be  interested in                                                               
the types of  businesses that are available.  Generally those are                                                               
espresso  stands,  snack bars  and  some  larger military  dining                                                               
contracts.  It takes  a significant  period  of time  to train  a                                                               
person to take over a site  and then they compete with people who                                                               
currently have sites. Someone with  more seniority in the program                                                               
could bid  on a site  and take it  over, giving up  their current                                                               
site  and making  it  available  to someone  else.  So, there  is                                                               
movement within the program.                                                                                                    
SENATOR GIESSEL said  it seems like section 3(c) and  (d) on page                                                               
3 say the agency may contact  blind persons directly and let them                                                               
know about this opportunity.                                                                                                    
MS.  WALSH responded  that people  who become  interested in  the                                                               
program contact  her directly.  She also  works closely  with the                                                               
Alaska  Center for  the Blind  and Visually  Impaired that  might                                                               
identify  someone who  may have  an interest  or some  potential.                                                               
They don't go and solicit  separately from that. The competitions                                                               
are advertised and  people have to be licensed  with them already                                                               
to be eligible to bid on a site.                                                                                                
SENATOR  GIESSEL referred  to the  list of  vendors and  said one                                                               
site didn't identify the name of  the vendor but mentioned a one-                                                               
year contract. She asked if  all those individuals are blind that                                                               
qualify under the existing statute.                                                                                             
MS. WALSH  replied that just  one person on that  chart qualifies                                                               
because he has a severe disability.                                                                                             
SENATOR DAVIS  asked if she  was referring  to the state  list or                                                               
the  federal list  and how  many blind  people on  the list  hold                                                               
vending licenses.                                                                                                               
MS. WALSH  answered there are three  with the state and  one that                                                               
is  currently under  a  one-year contract  at  Ft. Richardson,  a                                                               
difficult site to  fill because many people need a  driver to get                                                               
there and  for other reasons. Sometimes  a person that is  in the                                                               
process  of  being  trained  to  be  a  vendor  has  a  contract.                                                               
Sometimes a  site has closed  because no blind  individual wanted                                                               
SENATOR DAVIS  said according to the  chart there are a  total of                                                               
12 sites throughout Alaska and one that  is not on it making it a                                                               
total of 13 sites.                                                                                                              
MS. WALSH answered yes.                                                                                                         
SENATOR DAVIS  asked out of  the names listed under  Alaska State                                                               
how many are blind.                                                                                                             
MS. WALSH answered all but one.                                                                                                 
SENATOR  DAVIS  said  she  expected  testimony  from  people  who                                                               
probably won't agree with that.  She knew there were some changes                                                               
in the  law that at some  point made it more  difficult for blind                                                               
people to  be considered at  the top of  the list because  of the                                                               
addition of other  disabled persons. This bill  was also expanded                                                               
to include other  sites, which would give  more opportunities for                                                               
not only  the blind but any  other handicapped person to  be able                                                               
to bid.                                                                                                                         
2:34:02 PM                                                                                                                    
SENATOR  DAVIS  said she  hadn't  heard  Ms. Walsh  say  anything                                                               
necessarily  positive about  the bill  and asked  if she  thought                                                               
they were on the right track by expanding the facilities.                                                                       
MS. WALSH  replied that she  hadn't heard from anyone  about what                                                               
it means  to go into a  municipal site or into  a school district                                                               
site and wasn't sure of its  implications to the program, but she                                                               
would be  happy to  find out.  She doesn't  oppose the  bill, she                                                               
said, but  was here in a  neutral position to try  and understand                                                               
the need  for it, because  they believe that the  current statute                                                               
does give first priority to the blind.                                                                                          
2:36:12 PM                                                                                                                    
SENATOR  MENARD  asked  what  a "dry  stand"  means  relative  to                                                               
"Bill's Mini-cash" in the Anchorage federal building.                                                                           
MS. WALSH offered  to get more information, but  thought it could                                                               
be where magazines are sold and espresso-type drinks aren't.                                                                    
2:37:36 PM                                                                                                                    
JAMES  SWARTZ,  Executive   Vice  President,  Alaska  Independent                                                               
Blind, supported  SB 51.  He said  he has  been involved  in this                                                               
program since 1983  both as a vendor and director  of the program                                                               
(1992-95). At that time the  "severely handicapped" issue came up                                                               
when a  gentleman applied for  entrance into the program  and was                                                               
denied. His interpretation of  the "severely handicapped" portion                                                               
of  the Chance  Act is  that it  was supposed  to be  an entirely                                                               
separate program, and that led  to his resignation. But he stated                                                               
that statute  even made provisions  for the  severely handicapped                                                               
to  have their  own  committee for  active  participation in  the                                                               
administration of that program.                                                                                                 
He said  he believed  that clarification of  the priority  to the                                                               
blind was needed  because it had been recently  violated when he,                                                               
as a current  vendor in the program at the  Alaska Native Medical                                                               
Center, applied for  another facility that no  other blind person                                                               
had  applied for,  and  a non-blind  person  whose disability  is                                                               
being dyslexic was  awarded that facility over him.  He wanted to                                                               
know how first priority to the blind came into play there.                                                                      
MR.  SWARTZ  went on  to  say  that  Ms. Walsh  commented,  "It's                                                               
splitting  hairs," but  he thought  a  better interpretation  was                                                               
needed and  that is what  this bill  does. He explained  that the                                                               
Randolph-Sheppard Act was created in  1936 and the reason for its                                                               
creation was because  a huge group of veterans  returned from WWI                                                               
who suffered blindness caused by  exposure to mustard gas. It was                                                               
created because there  were no opportunities to  put these people                                                               
to work. Since that time,  all states except Wyoming have adopted                                                               
this act following the federal act  in suit. Only two states have                                                               
provisions for severely handicapped:  Georgia, where it has never                                                               
been enacted,- and Alaska.                                                                                                      
He summarized that the Division  of Vocational Rehabilitation was                                                               
created  to find  employment opportunities  for the  handicapped,                                                               
but  there is  "a little  piece of  pie in  there that  the blind                                                               
have," and he would like to keep that priority in the program.                                                                  
SENATOR  GIESSEL  remarked  that  he had  applied  for  a  second                                                               
location and as she looks at  the list of folks that are vendors,                                                               
she  saw another  gentleman with  two  sites. Yet  she heard  Ms.                                                               
Walsh imply  that each  individual could have  only one  site and                                                               
asked Mr.  Swartz how many  sites he thought an  individual could                                                               
MR.  SWARTZ  replied  nothing  in either  the  federal  or  state                                                               
programs limits  the number of sites  one can have if  he has the                                                               
qualifications to handle them. He  added that a "dry stand" sells                                                               
prepackaged products like magazines, candy bars and sodas.                                                                      
2:43:48 PM                                                                                                                    
LYNNE KORAL,  President, Alaska  Independent Blind,  supported SB                                                               
51. She  said that 70-80  percent of blind people  are unemployed                                                               
or underemployed.  For them that  means it's always  a recession.                                                               
People don't see  blind people as being  capable; their blindness                                                               
is seen first.                                                                                                                  
She related that  she conducts workshops on  abuse against people                                                               
with  disabilities  and the  worst  abuse  comes from  state  and                                                               
federal institutions  because they  do not understand  what blind                                                               
individuals' capabilities are. The  biggest employer of the blind                                                               
and  people  with disabilities  is  the  federal government,  but                                                               
blind people  don't want to be  known as the "worthy  poor." They                                                               
want  to have  the same  opportunities and  upward mobility  that                                                               
everybody else has. That is why  she is starting her own business                                                               
outside of the program.                                                                                                         
SENATOR GIESSEL  asked if  she knew  of a  waiting list  of blind                                                               
folks who want these vending sites.                                                                                             
MS. KORAL said she thought there was a list.                                                                                    
2:47:30 PM                                                                                                                    
SANDY SANDERSON,  Alaska Independent  Blind, supported SB  51. He                                                               
related  how  a  dyslexic  person  was  given  a  Ft.  Richardson                                                               
National Guard Armory  site over two blind persons  in 1995. That                                                               
is why they brought this bill to their legislators.                                                                             
SENATOR GIESSEL  asked if Ms.  Walsh could answer  two questions:                                                               
one  if there  is a  waiting list  for disabled  folk and  can an                                                               
individual have  more than one site  - as it appears  on the list                                                               
that they can.                                                                                                                  
MS. WALSH responded that she wasn't  aware of a waiting list; but                                                               
some people are  in training at this time. One  gentleman has two                                                               
sites because sometimes  it takes two sites to  generate a viable                                                               
income; the state has economic standards, as well.                                                                              
CHAIR EGAN  thanked everyone for  their testimony and said  SB 51                                                               
would be held for further work.                                                                                                 
        SB  81-PUBLIC RETIREE MED. BENEFITS: DEPENDENTS                                                                     
2:51:48 PM                                                                                                                    
CHAIR EGAN announced SB 81 to be up for consideration.                                                                          
SENATOR  DAVIS,  sponsor  of  SB 81,  said  she  introduced  this                                                               
measure  because she  felt Alaskan  retirees  were being  treated                                                               
unfairly when  they can't  insure their  dependent children   the                                                               
same way  active employees can  under the Affordable  Health Care                                                               
Act  that allows  dependent children  to stay  on their  parents'                                                               
insurance  until  age  26.  This   bill  seeks  to  correct  this                                                               
2:53:00 PM                                                                                                                    
TOM OBERMEYER, staff  to Senator Davis, said SB  81 requires that                                                               
dependent coverage for medical benefits  in certain state retiree                                                               
systems  be no  less than  that  of active  state employees.  The                                                               
state  decided  to  allow active  employees  to  keep  dependents                                                               
through age 26 on their  health insurance plans effective July 1,                                                               
2011,  but  specifically  excluded the  dependents  of  retirees,                                                               
citing federal legislation.                                                                                                     
MR. OBERMEYER  said he asked  for a memorandum (in  their packet)                                                               
from the  Legislative Legal Services  to interpret  that language                                                               
and it  states a contrary  opinion -  that retirees should  be in                                                               
this plan.                                                                                                                      
2:55:58 PM                                                                                                                    
MR.  OBERMEYER read  the  sponsor statement.  He  said the  prior                                                               
cutoff  date for  this group  was age  23. The  state's voluntary                                                               
change in  the active employee  medical benefit plan  matches the                                                               
private  insurance  mandate  under  the  Patient  Protection  and                                                               
Affordable  Care   Act  which  requires  that   insurers  provide                                                               
dependent insurance  coverage to age 26,  effective September 23,                                                               
2010. He said  that Linda Hall, Director,  Division of Insurance,                                                               
could verify  that all insurers  in the state have  complied with                                                               
this. Further the statement said:                                                                                               
     Although the  state is not a  regulated state insurance                                                                    
     company, but rather  a self-insured government employer                                                                    
     and  exempt  from  ERISA, it  provides  medical  health                                                                    
     benefits for  the four  retirement systems  affected by                                                                    
     this bill, including:                                                                                                      
     1. Public Employees Retirement System (AS 39.30)                                                                           
     2. Teachers' Retirement System (AS 14.25)                                                                                  
     3. Retirement System of Justices and Judges (AS 22.25)                                                                     
     4.  Elected Public  Officers Retirement  System (former                                                                    
     AS 39.37)                                                                                                                  
     While  state health  benefit plans  are not  subject to                                                                    
     the federal Employee Retirement  Income Security Act of                                                                    
     1974  (ERISA) which  establishes minimum  standards for                                                                    
     pension plans in private industry,  they are covered by                                                                    
     the  Public Health  Service Act  (PHSA), at  least with                                                                    
     respect  to the  dependent  coverage  provision in  the                                                                    
     PPACA.  Although there  is a  difference of  opinion by                                                                    
     the  state's Division  of Retirement  and Benefits  and                                                                    
     Legislative  counsel  as  to excepting  retiree  health                                                                    
     insurance  plan  based  on Interim  Final  Ruses  under                                                                    
     PPACA without  a formal court  interpretation it  s far                                                                    
     easier to require coverage  immediately under this bill                                                                    
     rather than  wait for court  action or  federal mandate                                                                    
     Moreover it is only fair  that the state extend medical                                                                    
     health  benefits to  dependents of  retirees to  age 26                                                                    
     while it  covers the  same for  active employees.   The                                                                    
     numbers of eligible dependents in  retiree plans can be                                                                    
     readily  identified  and  actuarial statistics  can  be                                                                    
     generated for  this young  and relatively  health group                                                                    
     of dependents.                                                                                                             
2:58:44 PM                                                                                                                    
BOB DOLL,  President, Retired Public Employees  of Alaska (RPEA),                                                               
supported SB 81. He explained that  each year the RPEA prepares a                                                               
list  of top  concerns for  the coming  legislative session,  but                                                               
this item  did not make  it to that  list. However, he  has heard                                                               
from members about it in  unprecedented numbers. Because it was a                                                               
relatively  new topic,  he polled  members by  email in  February                                                               
2011  to   establish  some  numbers.  Of   1050  respondents  (68                                                               
percent),  they determined  that  159 retirees  had  one or  more                                                               
children under 26 years of age.  The total number of children was                                                               
231;  of those,  140 were  ages 21-26.  They estimated  from this                                                               
sample that  about 70  dependents would fall  into the  age 23-25                                                               
ranges. Of those,  they also estimate that  about one-third would                                                               
have  some  other  kind  of  coverage  through  the  military  or                                                               
MR. DOLL said  it appears this coverage is of  primary concern to                                                               
women retirees. In many cases  they imagine these women postponed                                                               
their  childbearing until  they  were well  established in  their                                                               
state service and now find  themselves retired with children that                                                               
are still dependents. This group  is more concerned because their                                                               
spouses have passed  away or are departed for  some other reason.                                                               
RPEA  members  know that  the  issue  of  cost  to the  state  is                                                               
involved in any extension of  Alaska Care benefits; a majority of                                                               
them have been  supervisors and know what a budget  is. They know                                                               
that most things that are worthwhile  have a cost. They also know                                                               
it's possible to construct a  post-retirement health care plan in                                                               
which the retiree  shares some of the cost. They  already do that                                                               
in regard to  Dental/Audi/Visual coverage and long  term care and                                                               
life  insurance options.  So, he  urged some  similar arrangement                                                               
for dependents that  would take them off Medicare  and reduce the                                                               
cost of that program and yet  impose little or no additional cost                                                               
to the state.                                                                                                                   
Finally, he asked  the committee to think of  these dependents as                                                               
more  than  just  spreadsheet numbers.  They  are  Alaska's  next                                                               
generation and the  state of Alaska should have  the same concern                                                               
for them  as it has  for dependents of  active employees to  be a                                                               
part of that bright future that we all seek for Alaska.                                                                         
3:03:46 PM                                                                                                                    
SENATOR PASKVAN asked if the  Division of Retirement and Benefits                                                               
provided a legal opinion to support their position.                                                                             
MR.  DOLL  answered no;  this  is  the  first  time it  has  been                                                               
discussed publicly.                                                                                                             
3:04:26 PM                                                                                                                    
SENATOR  GIESSEL  asked him  to  explain  what  he meant  by  the                                                               
retirees being taken off of Medicare.                                                                                           
MR. DOLL  replied that  he was referring  to the  dependents that                                                               
had  no medical  alternative  but  to go  to  Medicaid. He  meant                                                               
Medicaid not Medicare.                                                                                                          
3:05:29 PM                                                                                                                    
MARIE DARLIN,  Legislative Task Force, AARP  Juneau, supported SB                                                               
81 and  for the  reasons Mr.  Doll stated.  She pointed  out that                                                               
this  brings more  parity between  active employees  and retirees                                                               
who kind of get lost in  the shuffle. Often retirees are left out                                                               
with the federal government as well as the state.                                                                               
This does have  an effect because it then makes  a difference for                                                               
some people who  are planning retirement, but  haven't gotten the                                                               
letter from  the state telling  them when they retire  their kids                                                               
up to  age 26 won't  be included  on their medical  coverage. She                                                               
said many  people have changed  their plans for  retiring because                                                               
they  suddenly found  out they  won't  be able  to include  their                                                               
children on  the medical  insurance then. To  try and  get health                                                               
care coverage  for student children  if they can't do  it through                                                               
state is almost prohibitive.                                                                                                    
CHAIR  EGAN said  Dan Wayne  from Legislative  Legal Service  was                                                               
available to answer questions.                                                                                                  
3:08:39 PM                                                                                                                    
SENATOR PASKVAN asked if he  had received a written legal opinion                                                               
from  the  Division of  Retirement  and  Benefits supporting  its                                                               
DAN WAYNE, Department of Law, Juneau, Alaska, replied no.                                                                       
SENATOR GIESSEL asked for the fiscal note.                                                                                      
SENATOR DAVIS responded that they do  have a fiscal note, but the                                                               
money won't  come from the  state. Most  of the money  would come                                                               
from the retirees' retirement plan.  She summarized that SB 81 is                                                               
an  important  piece  of  legislation. The  age  group  they  are                                                               
talking  about  doesn't  require  a lot  of  medical  and  health                                                               
treatment. Their  coverage won't be  that expensive, but  if they                                                               
are left  off and have  to go to  emergency rooms or  wherever to                                                               
get treatment, that state pays later.  It will pay less by acting                                                               
on this bill now.                                                                                                               
SENATOR PASKVAN asked  if anyone from the  Division of Retirement                                                               
and  Benefits  was  going  to  appear  before  the  committee  to                                                               
establish a foundation.                                                                                                         
CHAIR EGAN replied  he would make sure someone  from the division                                                               
would be here.                                                                                                                  
SENATOR PASKVAN  said he wanted to  know if they have  a position                                                               
as compared to a legally supported opinion.                                                                                     
MR.  OBERMEYER  apologized  that  the  fiscal  note  hadn't  been                                                               
distributed,  but as  Senator Davis  indicated,  the increase  in                                                               
cost to provide  this additional coverage would be  paid from the                                                               
Retiree Health Trust. His only  concern was that Buck Consultants                                                               
and Wells Fargo  put together low, medium and  high numbers based                                                               
on actuarial figures that may  not be relevant to this particular                                                               
population  group; SB  81 uses  a medium  number. He  thought the                                                               
fiscal note  needed to be  reexamined no  matter how the  bill is                                                               
funded. Dan Wayne's memorandum was based on website information.                                                                
3:14:02 PM                                                                                                                    
JIM  PUCKETT,   Acting  Director,  Division  of   Retirement  and                                                               
Benefits,  Department of  Administration (DOA),  said they  had a                                                               
legal opinion from the Department of  Law (DOL) and also from Ike                                                               
Miller, part of  the legal team that provides  tax consulting for                                                               
them.  He  offered to  provide  them  to  the committee  if  they                                                               
3:15:05 PM                                                                                                                    
CHAIR EGAN said  the answer is yes and they  would schedule SB 81                                                               
again in the not too distant  future. With that, he adjourned the                                                               
meeting at 3:15 p.m.                                                                                                            

Document Name Date/Time Subjects
SB 51 Employment Statistics - Braille Monitor.PDF SL&C 3/8/2011 2:00:00 PM
SB 51
SB 51 Article - Forbes.PDF SL&C 3/8/2011 2:00:00 PM
SB 51
SB 51 Employement Statistics - AFB.PDF SL&C 3/8/2011 2:00:00 PM
SB 51
SB 51 LAA Legal Memo.PDF SL&C 3/8/2011 2:00:00 PM
SB 51
SB 51 Employment Statistics - OK City Journal Record.PDF SL&C 3/8/2011 2:00:00 PM
SB 51
SB 51 Sectional Analysis.PDF SL&C 3/8/2011 2:00:00 PM
SB 51
SB 51 Sponsor Statement.PDF SL&C 3/8/2011 2:00:00 PM
SB 51
SB 51 Leg Research Report.PDF SL&C 3/8/2011 2:00:00 PM
SB 51
SB 51 Sponsor Substitute changes from original.PDF SL&C 3/8/2011 2:00:00 PM
SB 51
SB051SS-DOLWD-CS-3-4-11.pdf SL&C 3/8/2011 2:00:00 PM
SB 51
SB 51 Vendors and Vendor Statutes.PDF SL&C 3/8/2011 2:00:00 PM
SB 51
SB 81 LAA Legal Memo.PDF SL&C 3/8/2011 2:00:00 PM
SB 81
SB 81 Letter AARP support.PDF SL&C 3/8/2011 2:00:00 PM
SB 81
SB 81 Sponsor Statement.PDF SL&C 3/8/2011 2:00:00 PM
SB 81
SB081-DOA-HPA-02-24-11.pdf SL&C 3/8/2011 2:00:00 PM
SB 81