ALASKA STATE LEGISLATURE SENATE STATE AFFAIRS COMMITTEE  February 8, 2001 3:35 p.m. MEMBERS PRESENT  Senator Gene Therriault, Chair Senator Randy Phillips, Vice Chair Senator Bettye Davis MEMBERS ABSENT  Senator Rick Halford Senator Drue Pearce   COMMITTEE CALENDAR  SENATE BILL NO. 39 "An Act relating to an assistant adjutant general for national missile defense in the Department of Military and Veterans' Affairs." MOVED SB 39 OUT OF COMMITTEE SENATE BILL NO. 54 "An Act establishing the Alaska Veterans Advisory Council; and providing for an effective date." MOVED SB 54 OUT OF COMMITTEE SENATE BILL NO. 55 "An Act changing the name of the Alaska Pioneers' Home to the Alaska Pioneers' and Veterans' Home and of the Alaska Pioneers' Homes Advisory Board to the Alaska Pioneers' and Veterans' Home Advisory Board; relating to services for veterans in the home; relating to the advisory board for the home; making other amendments to the statutes relating to the home; making conforming amendments to other statutes; and providing for an effective date." HEARD AND HELD PREVIOUS COMMITTEE ACTION  SB 39 - No previous action recorded SB 54 - No previous action recorded SB 55 - No previous action recorded WITNESS REGISTER  Major General Phillip Oates P.O. Box 5800 Ft. Richardson, AK 99505-0800 POSITION STATEMENT: Explained benefits of SB 39 & testified in favor or SB 54 & SB 55 Mr. Laddie Shaw Special Assistant, Office of Veterans Affairs P.O. Box 5800 Fort Richardson, AK 99505-800 POSITION STATEMENT: Supports SB 54 Carol Carroll Director of Administrative Services, Office of Veterans Affairs 400 Willoughby Ste 500 Juneau, AK 99811 POSITION STATEMENT: Addressed the fiscal note on SB 54. Lt. Colonel Pat Carothers, Retired P.O. Box 32926 Juneau, AK 99801 POSITION STATEMENT: Testified on SB 54. Commissioner Jim Duncan Department of Administration P.O. Box 110200 Juneau, AK 99811-200 POSITION STATEMENT: Commented on SB 54 and testified on SB 55. Mr. Merrill Hakala 140 Front Street Fairbanks, AK 99707 POSITION STATEMENT: Opposed to SB 55. Mr. Gerald Bohms Box 80155 Fairbanks, AK 99708 POSITION STATEMENT: Opposed to SB 55. Mr. Gary Berry American Legion 9070 N Douglas Hwy Juneau, AK 99801 POSITION STATEMENT: Supports SB 55. Ms. Alfreda Dore Juneau, AK 99801 POSITION STATEMENT: Asked question about SB 55. ACTION NARRATIVE TAPE 01-4, SIDE A  Number 001 CHAIRMAN GENE THERRIAULT called the Senate State Affairs Committee meeting to order at 3:35 p.m. Senators Phillips, Davis and Chairman Therriault were present. There were three items on the agenda, SB 39, SB 54 and SB 55. The first order of business was SB 39. SB 39-ASST. ADJUTANT GENERAL FOR MISSILE DEFENSE    MAJOR GENERAL PHILLIP OATES, Adjutant General for Alaska, Commander of the National Guard, and Commissioner of the Department of Military and Veterans Affairs thanked the committee for the opportunity to testify. He said that if this request passes, Alaska will be the first state in the nation to establish an assistant adjutant general for national missile defense. He said that the number of general officers for the Department of Defense is controlled by law, but that the assistant adjutant generals in the National Guard are not. Those positions are established through state statute and are authorized by the Department of Defense through the National Guard Bureau. In Alaska, there is an Assistant Adjutant General for Army and an Assistant Adjutant General for Air. The requirement to have the authorization as state statute is due to the fact that the National Guard is first a state organization and then a federal organization. Therefore, in order to have the position, it must be placed in state statute first. MAJOR GENERAL OATES went on to say that this position is necessary because "We want to be prepared here in Alaska and send a very clear signal to President Bush's Administration and to the national decision makers that Alaska is ready and committed for this mission." The position is fully funded federally in both the traditional National Guard role and its potential larger federal capacity. The position was originally established as a traditional guard position with requirements for duty of one weekend per month, two weeks per year and a mobilization day for members with employment elsewhere. In addition, this position will lead into a role in the full fielding of the national missile defense activities and ultimately as the commander or director of the site activation command for national missile defense in Alaska. This position would also be fully federally funded and would operate under a memorandum of understanding between National Missile Defense Joint Program Office (NMDJPO) and the State of Alaska. Number 341 This position would provide an Alaska National Guardsman who understands Alaskan issues and who would work for both the Adjutant General of the State of Alaska in a traditional National Guard role and for the National Missile Defense Joint Program Office in the role of Commander of the Site Activation Command in Alaska. Therefore, the state would be directly involved with military decisions by the Department of Defense in the development and deployment of a national missile defense system in Alaska. As stated before, this position is the first of its type in the nation so its importance can't be understated. The site activation command will be an organization that is made up of 30 to 50 senior civilians and full colonel level military officers. MAJOR GENERAL OATES said, "We envision into the future that national missile defense is just one piece of this, because to actually have a viable national missile defense system you have to partner with other mission sets that we're assuming in the National Guard. Those being the manning of Clear Air Force Station (AFS) for space surveillance and the security gun installation, the manning of the regional air operations center at Alaska North American Aerospace Defense Command (NORAD) region headquarters at Elmendorf." Number 440 This position also provides opportunities to partner with other states. There will be partnering done with the U.S. Space Command, U.S. Army Space Command, National Missile Defense Brigade Level Headquarters and the National Guard of Colorado. There will also be partnering in New Mexico where training is done for air defense artillery, in Alabama where the national missile defense effort is led by Boeing, and in Florida where there is advanced work in range safety and air defense artillery training. The Department of Military and Veterans Affairs believes that establishing this joint position will lead the Alaska National Guard into the future and will fully meet Alaskan interests in the fielding and operation of the national missile defense system. There will be a very strong presence in the interior of Alaska with the national missile defense activities fielded at Fort Greeley, Clear AFS, and possibly in Fairbanks. MAJOR GENERAL OATES thanked the committee and said he would be happy to answer any questions. CHAIRMAN THERRIAULT asked if this had to be done in statute or was the option available to address the issue through administrative powers. Another concern is about federal funds. Are they available for three years for sure? MAJOR GENERAL OATES said that it was mandatory that this be addressed through state statute or the position will not exist. State statute now allows for an adjutant general for army and air but not the guard. He wanted to make it clear that this position would require the same approval process as any general officer in the Alaska National Guard. The Governor makes the selection and the Legislature provides confirmation. Funding for the position in its traditional role would be the same as for any National Guard positions and isn't subject to any time limit. Funding for the expanded position should be available for the five to seven years projected for the site activation command. When the funding expires, the position could revert to its traditional role. The fiscal note accompanying the bill lists federal receipts for the salary of a brigadier general, allowances and any Alaskan benefits paid for an Alaskan employee. There is precedence for salaries paid this way. Number 712 CHAIRMAN THERRIAULT asked if it is because the position is specifically for an adjutant general that it needs to be in statutes. MAJOR GENERAL OATES said that is correct, any general officer position manned by the Alaska National Guard bureau must be established in state statute. At present, there is authority for just two positions. They are the assistant adjutants general for army and for air. CHAIRMAN THERRIAULT asked if existing statute allowed for subordinate officers. MAJOR GENERAL OATES said there is no requirement in state statute for any position below that of a general officer. At the national level, law limits the number of general officers. Correspondingly, the Governor and Legislature establish the number of general officers the state will have. Number 900 CHAIRMAN THERRIAULT said his main concern was whether it needed to be established in state statute and whether the funding was assured. He doesn't want the state to have to pay for the position if federal funding disappears. MAJOR GENERAL OATES said that if the federal funding disappears then the position would also disappear since it can't be funded by the state. CHAIRMAN THERRIAULT asked for questions and if there was anyone in Juneau or on teleconference wanting to testify. There was no response. He said there was no CS and asked for the will of the committee. SENATOR PHILLIPS made a motion to move SB 39 and the fiscal note from committee with individual recommendations. CHAIRMAN THERRIAULT asked for objections. There were none. The next order of business was SB 54. Number 1034 SB 54-ALASKA VETERANS ADVISORY COUNCIL      CHAIRMAN THERRIAULT asked Mr. Laddie Shaw to testify via teleconference. MR. LADDIE SHAW, from the Office of Veterans Affairs, testified that the Alaska Veterans Advisory Council represents about 63,000 veterans in the state. The council was established by administrative order in 1996 but it has no permanence unless it is placed in state statute. MAJOR GENERAL OATES said that the purpose of the council is to look at policy issues and how the state can better serve veteran needs. Alaska has the second highest number of veterans per capita of any state in the nation so putting this into statute not only brings permanence but also recognizes the importance of veterans' contributions without replacing Veteran Service Officers, Veterans of Foreign Wars, Disabled American Veterans, the American Legion and the Veterans Administration. SB 54 will help the state develop the policy needed to recognize its veterans. The council would give recommendations to the Governor and would be a body that would transcend individual administrations. CHAIRMAN THERRIAULT said that the chair of the council would also serve on the Alaska Pioneers' Home Advisory Board thus providing a link to the next bill to be heard, SB 39. MAJOR GENERAL OATES said that was correct. SENATOR PHILLIPS asked where the meetings would be held. MAJOR GENERAL OATES said that the group would meet twice annually and as Senator Phillips had mentioned in a previous conversation, it is important to change the meeting location each time. Locations aren't required or restricted but the amount of money required to send the council members to different locations would vary greatly depending on the location. CHAIRMAN PHILLIPS asked if the fiscal note needed to be changed to reflect two meetings per year. MAJOR GENERAL OATES said it was his understanding that the fiscal note isn't part of the bill itself so the change wasn't necessary. CHAIRMAN THERRIAULT told Senator Phillips that they would change the fiscal note so that it isn't so site specific before moving it from committee if he preferred. MS. CAROL CARROLL, who wrote the fiscal note for SB 54, said that she would be happy to change the fiscal note to reflect two meetings per year with a rotating location. LT. COLONEL (RETIRED) PAT CAROTHERS said that under the statute, the council would meet up to four times per year. In the five years that the council has been in existence, they have found that face- to-face meetings are more productive than any other type. They have been meeting in Anchorage in the fall because the majority of membership is there. They then meet in Juneau in late January to coincide with the legislature. In May there is a third meeting and that is a telephonic meeting. Number 1465 CHAIRMAN THERRIAULT asked if the council has had its actions hampered due to its non-permanent status. LT. COLONEL (RETIRED) CAROTHERS said they'd like this put into statute because a previous administration abolished the Veterans Advisory Council and it could happen again in another administration. When this happens, the voice for veterans suffers a loss of continuity of effort. SENATOR PHILLIPS said that meetings in rural Alaska are important as well. Face to face meetings shouldn't be held in just Anchorage and Juneau. MAJOR GENERAL OATES said he believes it is valuable for this organization to have a presence throughout the state and the fiscal note will be changed to reflect that sentiment. SENATOR DAVIS asked if rural members were represented in the 20- member council. LT. COLONEL (RETIRED) CAROTHERS said that there were rural members from Kodiak, Kotzebue and Bethel. MAJOR GENERAL OATES said that was a good point, there needs to be adequate representation throughout the state. CHAIRMAN THERRIAULT said that there's nothing in the wording of the bill that specifically speaks to the Pioneer/Veterans Home Advisory Board. COMMISSIONER DUNCAN said that SB 55 places a member of the Alaska Veterans Advisory Council on the Pioneer/Veterans Home Advisory Board. MAJOR GENERAL OATES wanted it understood that SB 54 should stand on its own and not be dependant on action on SB 55. CHAIRMAN THERRIAULT asked for any other testimony. He announced that there was no CS and asked for amendments. There were none. SENATOR DAVIS made a motion that SB 54 and the rewritten fiscal note be moved from committee with individual recommendations. There were no objections. CHAIRMAN THERRIAULT confirmed that Carol Carroll would rewrite the fiscal note and that SB 54 would move from committee with the rewritten note. The last order of business was SB 55. SB 55-PIONEERS' AND VETERANS' HOME/ADVISORY BD    CHAIRMAN THERRIAULT asked Major General Oates if he would like to testify on SB 55. MAJOR GENERAL OATES said he was in support of SB 55 and would testify after Commissioner Duncan. Number 1787 JIM DUNCAN, Commissioner of Administration, said that SB 55 was introduced by the Governor and would require a number of changes to the current Pioneer Home system. It would rename the present Pioneer Home system to Pioneer and Veterans' Home system; it would provide, in statute, a preference for veterans admission; it would change the name of the Pioneer Home Advisory Board to the Pioneer and Veterans' Home Advisory Board; it would require at least two members of the board to be veterans; and finally it would require that one of those board members be the chairman of the Veterans' Advisory Council. COMMISSIONER DUNCAN then gave some background information explaining why the Governor has introduced the bill. In 1992, legislation was passed to establish a veterans' home in Alaska. It was to be operated by the Department of Administration but would meet federal requirements so that the residents payments and federal funding would cover the costs of operation. In 1998 the legislature amended the 1992 statute to allow the proposed veterans' home to provide nursing care. The idea behind this was to increase federal funding so that the state didn't have to make up operational shortfalls. However, this wasn't successful. State funding would still be required because federal funding and veterans payments wouldn't cover the nursing costs in Alaska. Thus, there is still the unrealized intent and definite need to serve the veterans. Number 1914 Governor Knowles recently appointed a cabinet level team comprised of the Commissioner of Administration, Major General Oates and Commissioner of Health and Social Services to explore options to fulfill the commitment made to veterans in the 1992 and 1998 legislation. One of the options explored was to determine the cost of a stand-alone veteran's home. The capital construction costs for an 80-bed facility would be about $24 million with federal funding providing about 65 percent. This would require state funding of about $8.5 million for construction and then an additional $7.2 million annually for operational costs. The federal government would contribute about $4 million, residents would pay about $900,000 and the state would have to contribute the balance, which is about $2.4 million per year. Number 2000 Looking at other options, the team determined that using the current Pioneer Home infrastructure would be more fiscally responsible. There are six Pioneer Homes located throughout the state and they are not being fully utilized. Using this infrastructure would make it easier to provide long term care needs, closer to the veterans' homes and communities, than if there was just one veterans' hospital in the state. COMMISSIONER DUNCAN emphasized the quality of the Pioneer Home System and pointed out that it is a system that is not fully utilized. There are 600 beds in the six homes and there are about 90 vacant beds at any given time. SB 55 designates 125 beds or 21 percent of the total beds for veterans. It would say veterans have a preference in statute, while the 125-bed designation would be instituted through regulation. In the system now, there are about 78 veterans. Of the 167 people on the active waiting list, 44 are veterans. If funds were made available to fill the empty beds, those 44 veterans would be accommodated as well as close to 50 pioneers who are on the active waiting list. SB 55 would provide needed funding for 24 hour nursing care, which is the level of care that is needed for those beds. The fiscal note accompanying the bill indicates $2.6 million in general funds and about the same in pioneer home receipts which would provide the funding to hire necessary staff to fill the 90 vacant beds. COMMISSIONER DUNCAN explained that the fiscal note intentionally does not include federal receipts. Care has been taken so that the Pioneer Home system is not changed to require federal regulation such as would happen if it were under the Veterans Administration system. Otherwise, many Pioneer Home requirements such as residency, age and building codes would have to be changed. Number 2225 While federal dollars aren't being solicited, they are actively exploring options with the federal government to discover what might be available in terms of federal assistance and federal support. COMMISSIONER DUNCAN said that they had worked closely with affected interest groups and that there were a number of supporting letters in the committee packets one of which was from Senator Ted Steven's office. He went on to point out a paper giving the background and history of the proposal as well as a number of frequently asked questions. COMMISSIONER DUNCAN concluded his testimony and said that Major General Oates had some comments on SB 55. CHAIRMAN THERRIAULT asked for questions first. There were none so he asked Major General Oates to address his comments to the committee. Number 2300 MAJOR GENERAL OATES thanked Chairman Therriault for the opportunity to testify. He went on to say that it was important to consider why Alaska does not have a veterans home since Alaska ranks second of the 50 states in terms of its number of veteran residents. In addition, Alaska is the only state in the Union that does not have, or is not in the process of building, a state veterans' home. He assured members that the lack of a veterans' home was not due to apathy, but rather due to uncertainty of where such a home should be located and how you afford such a facility when you already have a costly pioneer home system. Because of the size on the state, it would also be very difficult to meet veterans' needs state wide with just one facility. Veterans would be displaced from their communities when they needed care. Side B Number 2320 Looking for creative solutions, they came up with the idea to use existing resources. There are Pioneer Homes in Ketchikan, Sitka, Juneau, Palmer, Anchorage and Fairbanks with empty beds due to under staffing. If these facilities were utilized, there would be no new construction costs, the problems associated with one regional center would be ameliorated and there would be more beds for less operating costs than if a single 80-bed home were built. Senator Stevens has expressed a willingness to help but says he can't move ahead until the state takes the first step. He will do all he can to help make this a model of federal/state cooperation on veteran's issues. Senator Frank Murkowski is bringing Secretary of Veterans' Affairs, Anthony Principi, to Alaska and one of the important items on his agenda is to visit the Anchorage Pioneer's Home and discuss the merits of this proposal. The Veterans' Administration is looking for creative proposals to meet the needs of its veterans because the current veterans' home system is expensive, not regionally located and isn't meeting the care needs of veterans. This proposal is a first step in meeting those needs. Number 2237 MAJOR GENERAL OATES said that veterans need to be shown that they are important. Providing for their care needs is one way to show the measure of their importance. He went on to say that many of the veteran organizations statewide have indicated support for this proposal. There is also support from many of the state pioneer organizations. He reiterated the need to take the first step to provide for veterans living in Alaska and said that the state could have a nationally recognized model program. CHAIRMAN THERRIAULT asked for questions. He said that although there were letters of support there were some seniors that have questions and it is the duty of the committee to ensure that the move is advantageous. Some of the letters of support indicated a very limited understanding of the details. COMMISSIONER DUNCAN said that the proposal wasn't easy to understand but that the Department of Administration is in the process of organizing statewide visits to provide information and answer questions. He emphasized that this proposal should benefit both pioneers and veterans in the state. Number 2103 CHAIRMAN THERRIAULT asked for a breakdown on the vacancy rates in each of the homes and number of veterans in each of the homes. COMMISSIONER DUNCAN said that a portion of the information was in the packet but that he would provide the number of veterans in each home and the information about which home each of the 44 veterans on the active waiting list had requested. CHAIRMAN THERRIAULT wanted information on how many individuals might have to move to a different location due to lack of bed space in the community of first request. COMMISSIONER DUNCAN said that the vacancies are primarily in Palmer, Anchorage and Sitka. MAJOR GENERAL OATES added that the plan stipulates that if a bed isn't available in the community of your choice you may enter the home in another community then move to the community of your choice when a bed becomes available. CHAIRMAN THERRIAULT called for teleconference testimony. MR. MERRILL HAKALA testified via teleconference saying that he was a veteran and was opposed to the pioneer homes becoming pioneer/veteran homes but was in favor of a stand-alone veteran's home. If the proposal were adopted, there would be a "complete change in what the pioneer homes were meant to be." He said all veterans are welcome as long as they meet the current entrance requirements and it should stay this way. He went on to say that if the state would recognize Alzheimer's disease and related dementia as a mental disease there would be Medicaid coverage and therefore costs to the state and individual residents would be reduced. MR. GERALD BOHMS testified via teleconference saying that he too was a veteran and not in favor of changing the current Pioneer Home System. He didn't think it was fair for veterans to be given preference. He pointed out that the state could fund the vacant beds now and they wouldn't be empty. MR. GARY BERRY testified in person and said that he was representing the American Legion, Veterans of Foreign Wars and Disabled American Veterans. These Alaska service organizations are in favor of designating 125 beds in the Pioneer Homes for veterans. They feel that all Alaskan veterans deserve long term care for physical and mental disabilities. It is time to show appreciation to these men and women. CHAIRMAN THERRIAULT called upon Lt. Colonel (Retired) Pat Caruthers to testify. LT. COLONEL PAT CARUTHERS said that he supports this proposal because it benefits both veterans and pioneers. If this proposal is passed, critical care nursing will be funded and it is the lack of funding for this highest nursing tier that is causing the vacancies. Number 1474 MR. JOHN DAPCEVICH said he was a member of the American Legion, Veteran of Foreign Wars, Disabled American Veteran, Pioneer of Alaska and has served the last four governors on the Pioneers Advisory Board. The Pioneer Advisory Board has unanimously given its support to SB 55. He said that veterans are just as eligible in the current pioneer homes as non-veterans and their entry requirements will be the same as non-veterans. This proposal isn't going to displace pioneers who are not veterans. SENATOR PHILLIPS asked for the make up of the Pioneer Advisory Board. MR. DAPCEVICH said that the Governor appoints a member from every community having a home; there is one at large appointment and the chairperson of the Older Alaska Commission serves on the board. Number 267 MR. JIM KOHN, Director of Alaska Longevity Program that includes the Pioneers' Homes, wanted to comment on two points made earlier. First was preference. It should be understood that Pioneer Home beds are currently filled with about 17 percent veterans and over 30 percent of those on the waiting list are veterans. Looking at the statistical makeup of the waiting list, it is apparent that, over time, there will be more than 21 percent of the beds filled with veterans whether they are given a preference or not. After the 125 beds are filled, it is unlikely that a veteran would ever need to be given preference. The second issue he wanted to address was about Medicaid funding for the home. He said that the homes would be changed completely with Medicaid funding because residency and age requirements would have to be abolished. They would no longer be Pioneer Homes. This needs to be understood if you're looking at other sources of revenue. CHAIRMAN THERRIAULT asked, "If you're the next person on the list and you weren't a veteran and a veteran space was open would you get that spot?" MR. KOHN said that it was more complicated than that. He explained that people generally apply to the waiting list in their own communities. If an opening was to occur in Anchorage, for example, and veterans were occupying 124 beds, the veteran priority list would be given preference. If there were no veterans on the Anchorage waiting list then the next person would be given the bed. Then, the next bed opening in any community would be given veteran priority. If the number of veterans filling the beds rose to more than 125, there would be no veterans preference given until that number fell below 125. ALFREDA DORE asked the chair if she could address a question to Mr. Kohn. She came forward and asked if widows and widowers of eligible veterans would be given preference in the Pioneer Homes as they are in Veteran Homes in the Lower 48. MR. KOHN said that the Pioneers' Homes have always made an effort to keep spouses together when one needs to enter the home and they would continue to do so. However, this issue would have to be looked at carefully to decide whether or not spouses and other family members of qualified veterans were given preference. He said to keep in mind that in Veterans' Homes, family members of veterans may not occupy more than 25 percent of available beds. He went on to say that this should be resolved through regulation as the process moves forword. CHAIRMAN THERRIAULT asked if a regulation packet was being developed for this legislation. MR. KOHN said none had been started officially but that an outline was being prepared. CHAIRMAN THERRIAULT asked for a copy of what had been developed. He then asked for any other questions. Number 665 SENATOR DAVIS asked them to address the question as to whether or not it is a regulation to give spouses and other family members preference. MR. KOHN said that they want to make sure that the Pioneer Home System not come under federal regulation. They have made this clear to both the Alaska Delegation and Secretary of Veterans' Affairs Principi who has expressed interest in innovative programs for veteran homes. He said that perhaps the Veterans Administration would be able to waiver funds designated for a Pioneer/Veteran Home. Number 549 CHAIRMAN THERRIAULT said that when looking at the fiscal note for SB 55 it shows it to be general fund and program receipts so all the vacant beds could be opened with these funding sources to anyone on the waiting list. MR. KOHN said that is correct. The vacant beds are general care beds and the people on the waiting list need high level care so providing additional funding for high level care would fill those beds. However, if that were done there would be a missed opportunity to work with the Veterans Administration to find innovative ways to care for veterans in assisted living programs. Number 381 SENATOR PHILLIPS asked if the opportunity became available recently and whether there is urgency to act. MR. KOHN said he does believe that time is of the essence. The Governor has given a mandate to find a program that will work and this is what the three commissioners have devised and it is a program that has ignited the interest of the Veterans Administration. CHAIRMAN THERRIAULT asked if there was anyone else who wanted to testify either in person or via teleconference. There was no one. He said that if there is a bill requiring more work or if work needs to be done on the wording of an amendment the bill will be brought up again as bills previously heard. However, because of the level of interest in this bill he will give generous notice before this bill is heard again. CHAIRMAN THERRIAULT adjourned the meeting at 5:15.