CS FOR SENATE BILL NO. 55(STA) "An Act relating to the Alaska Pioneers' Home and the Alaska Pioneers' Homes Advisory Board; relating to admissions to, payment assistance for, and transfers from the home; relating to housing and services for veterans; and providing for an effective date." This was the second hearing for this bill in the Senate Finance Committee. Senator Ward indicated he had prepared no amendments to this legislation. Senator Wilken moved to adopt CS SB 55, 22-GS1040\J as a working draft. Co-Chair Kelly objected for discussion. Senator Wilken recapped discussions from previous hearing whereby he opined that some decisions regarding services for Alaska veterans were being made too quickly. He reminded the Committee of his comments that while Alaska is the only state without veterans' homes, it is also the only state with pioneers' homes. He agreed with the premise of combining the pioneers' homes with veteran's housing; however further efforts are necessary to achieve this. Senator Wilken pointed out for example that it remains uncertain whether the State's six pioneer home facilities would meet the required standards for veterans' housing. He explained that federal requirements prohibit senior veterans' care in conjunction with other veterans' services. He furthered that it has been learned that it is uncertain whether federal requirements would allow the operation of the pioneers' homes together with veterans' homes. He also stressed that the federal funding, which has been a primary incentive for the establishment of veterans' homes in Alaska, has not been guaranteed. Senator Wilken asserted, "If we're going to do this, lets do it right. Let's step back for a moment and let's look at the alternatives." He then directed attention to a spreadsheet, "Alternatives", he had distributed [copy on file], which lists six options: 1) Do Nothing, which he did not anticipate would occur, 2) Stand Alone, and he referenced a 1992 study about the significant expense of constructing a stand-alone veterans' housing facility, 3) Convert existing Pioneers' Home to Veterans' Home, 4) Separate Pioneers'/Veterans' Home, dividing existing Pioneers' homes into separate wings for veterans and pioneers. 5) Combined Pioneers'/Veterans' Home, similar to the current operation, and 6) Other. Senator Wilken noted the proposed committee substitute continues to support a proposed study of the six aforementioned alternatives, encourages negotiation with the federal government to secure funding for veterans' housing, and allows for the creation of a pilot program. Senator Wilken expressed his intent to review this issue in a few years to determine the option that would be in the best interest of the pioneers and the veterans. He remarked that if "tens of millions of dollars" are to be expended, those funds should be leveraged to best serve veterans, as opposed to implementing a "hurried" decision that may be regretted five or ten years in the future. Senator Ward announced he would vote to adopt the committee substitute. He spoke to a unique opportunity and talked about the patriotic aspects of supporting veterans. He surmised that changing the name of the State's pioneers' homes to reflect veterans is the goal of the Knowles Administration. However, he also was aware that many Alaskan pioneers do not support changing the name of the homes. He expressed his intent to make any name change contingent upon actual receipt of federal funds. He emphasized that he did not want to loose the opportunity to receive federal funds for pioneers' homes, although he relayed that he had spoken to US Senator Ted Stevens and did not receive a commitment that funding would be forthcoming. Senator Ward predicted that simply changing the name of the facilities would not guarantee receipt of federal funds. JIM DUNCAN, Commissioner, Department of Administration appreciated the efforts of Senator Wilken with regard to the proposed committee substitute. However, Mr. Duncan pointed out that intent language alone is inadequate to demonstrate to the federal Veterans' Administration, the State's "true strong commitment" to recognizing Alaska's veterans and the intent of accommodating them in the Pioneer Home system. He suggested that changing the name of the Pioneer Homes would provide a necessary "tool" in negotiations with the Veteran's Administration to secure funding for veterans' benefits. Mr. Duncan referenced a letter addressed to him from Anthony J. Principi, Secretary of Veterans Affairs dated April 2, 2002 [copy on file.] Mr. Duncan asserted this letter "outlines very clearly" the understanding between the State and the federal Veterans' Administration that some current federal regulations may "cause us some difficulty right now" but that the federal agency is "willing to work with us to overcome that" even if federal legislation is required. He predicted that federal legislation would not be necessary, but emphasized that the Veterans' Administration intends to assist the State in preserving ownership and management of the unique pioneer home system as well as seek common ground for potential demonstration projects. Mr. Duncan addressed Senator Ward's suggestion of making a name change contingent upon an agreement between the State and the Veterans' Administration. Mr. Duncan informed he had not evaluated this proposal, as it had not been previously raised either in relation to the bill or the proposed committee substitute. Co-Chair Kelly pointed out that the aforementioned letter is not a binding document or a memorandum of understanding, but rather it outlines a conversation held with Mr. Principi. Senator Ward noted that in negotiations between the State and local governments, an "intergovernmental agreement" is used and he asked if such an agreement would be appropriate in this situation. Mr. Duncan clarified his testimony regarding the letter from Mr. Principi that it is a "memorandum for the record", which outlines the progress to date as well as future intentions. He stated the goal of these negotiations is that the final document would be a signed agreement between the State, the Pioneers' Home administration and the federal Veterans' Administration, containing the provisions of a new demonstration project. Senator Hoffman requested General Phil Oats speak to the impacts of the proposed committee substitute. PHIL OATES, Adjutant General, Commissioner, Department of Military and Veterans Affairs, "truly believed" in Senator Wilken's support for veterans and pioneers; however, cautioned that the committee substitute would not accomplish the intended goals. General Oates explained the two issues at hand: a name to indicate that a facility is a home for veterans, and a priority given to veterans. He stated that Senator Ward's suggestion regarding a contingent name change is "creative" and could possibly be implemented in a manner that would preserve the identity of the Alaska Pioneers' Homes. General Oates also suggested operating under two names within one structure as an alternative. He stated that instituting a "percentage preference" of the number of veterans' admitted to the pioneers' homes would comply with the Veterans Administration requirements and would be consistent with veterans' homes in other states. He clarified that the State must "take the steps to establish" veterans' housing, then the Veterans' Administration assistance would follow. He spoke of calculating population percentages to determine the number of veterans given preference. Co-Chair Kelly noted that because of the limited amount of time remaining in the legislative session, significant changes could not be made to this bill. He recommended passing this bill from Committee at this hearing and suggested Senator Ward work with Representative Coghill. Senator Wilken recalled the State approached the Veterans' Administration with the intent to offer long-term care housing to veterans. He surmised that because the State does not "jump ahead" and change the name of the pioneers' homes, the argument is made that the State is failing to demonstrate a commitment. He emphasized this committee substitute provides that the State would expend $250,000 to conduct a mandated report of the alternatives to be presented to the next Legislature. He did not predict the federal government would deny funding in this situation. Senator Hoffman agreed with Co-Chair Kelly that this legislation must be sent to the House of Representatives. He disagreed the matter should be held until the next legislative session because many current legislators might no longer be in office. He also pointed out a new gubernatorial administration would be in office and that priorities might be different. Co-Chair Kelly directed the Committee to address discussion to the motion to adopt the committee substitute. Senator Ward suggested the Committee adopt the committee substitute, but stressed the final version of this bill must have the unanimous support of all legislators. Senator Wilken remarked that it is irrelevant who holds legislative office during the next session. He deferred the decision to future lawmakers, predicting they would make the "right decision." Senator Olson objected to adoption of the committee substitute. A roll call was taken on the motion to adopt the committee substitute as a working draft. IN FAVOR: Senator Ward, Senator Wilken, Senator Austerman, Senator Green and Co-Chair Kelly OPPOSED: Senator Hoffman, Senator Leman and Senator Olson ABSENT: Co-Chair Donley The motion PASSED (5-3-1) The committee substitute was ADOPTED as a working draft. Senator Ward "moved committee substitute for Senate Bill number 55 out of Committee with individual recommendations and accompanying notes." Senator Austerman pointed out the committee substitute would require amended fiscal notes. Senator Ward amended his motion to stipulate, "Revised notes is what I meant to say; revised accompanying notes." Senator Wilken offered to work with Senator Ward to address the concerns raised. Co-Chair Kelly summarized the Committee's intent to pass this bill to the House of Representatives. He warned that "political hay" must not be made of this action, "because it could be killed like that [snap fingers]." Senator Leman commented, "I had heard some things earlier today that give me hope that we could maybe reach something this year." He explained this pertained to the proposal of a demonstration project, different from that contained in the committee substitute. He expressed he is not concerned that the name change must be made this year and predicted that if and when an agreement is reached with the Veterans' Administration, the name of the pioneers' homes could be changed. Co-Chair Kelly noted public testimony was taken on this bill earlier in the day. GARY BERRY, American Legion, testified that the Committee has "lost sight" of the issue. He asserted that Alaska veterans' organizations did not "ask for very much" of the Legislature this session and listed five items including a pioneer/veterans home and a veterans' home study. He spoke of his efforts in lobbying the Legislature for the past ten years, during which time "nothing has happened." He noted two other veterans' home studies have been undertaken already but have had no result. He charged that one of the studies was conducted by the State and was biased. Co-Chair Kelly assured the Committee's action in adoption the committee substitute is "a step in the right direction." He explained the process of passing legislation through both bodies of the Legislature before a session adjourns. He assured the specific language contained in the committee substitute would likely be amended. Senator Hoffman informed that if the language were not amended he would probably vote against the legislation. GENE DALL, Legislative Officer, Veterans of Foreign Wars Post 5559, testified about the approximately 100 beds in the pioneers' homes that have remained empty for four or five years. He warned that with budget reductions, an additional ten beds would become empty. He told of waiting lists and the need for funds to staff the facilities. Mr. Dall asserted that action to create long-term care for veterans in Alaska must occur while US Senator Ted Stevens is in office. Mr. Dall recalled a speech made by Senator Stevens to the Alaska Legislature in which he indicated his support of this bill. Mr. Dall stressed that Senator Stevens has the necessary clout to secure federal funding and told of the numerous congressional actions taken by Senator Stevens on behalf of the various organizations Mr. Dall represents. He avowed of Senator Stevens, "If he says he'll do it, he'll do it, and he wouldn't say he'd do it if he couldn't do it." There was no objection and CS SB 55 (FIN) with forthcoming fiscal notes MOVED from Committee. [Note: Fiscal notes for the Senate Finance committee substitute were not produced as the Senate Rules Committee adopted a committee substitute.]