Legislature(2005 - 2006)HOUSE FINANCE 519
05/09/2005 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB153 | |
| HB68 | |
| SB22 | |
| SB164 | |
| SB22 | |
| SB135 | |
| SB73 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 153 | TELECONFERENCED | |
| + | SB 22 | TELECONFERENCED | |
| + | SB 164 | TELECONFERENCED | |
| + | SB 135 | TELECONFERENCED | |
| += | HB 68 | TELECONFERENCED | |
| += | SB 73 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
May 9, 2005
8:48 a.m.
CALL TO ORDER
Co-Chair Meyer called the House Finance Committee meeting to
order at 8:48:24 AM.
MEMBERS PRESENT
Representative Mike Chenault, Co-Chair
Representative Kevin Meyer, Co-Chair
Representative Bill Stoltze, Vice-Chair
Representative Eric Croft
Representative Richard Foster
Representative Mike Hawker
Representative Jim Holm
Representative Reggie Joule
Representative Mike Kelly
Representative Carl Moses
MEMBERS ABSENT
Representative Bruce Weyhrauch
ALSO PRESENT
Nona Wilson, Legislative Liaison, Department of
Transportation and Public Facilities; Cheryl Frasca,
Director, Division of Management & Budget, Office of the
Governor; Richard Benavides, Staff, Senator Bettye Davis;
Jerry Fuller, Medicaid Director, Department of Health and
Social Services; Tim Berry, Staff, Senator Bert Stedman;
Chuck Harlamert, Revenue Audit Supervisor, Tax Division,
Department of Revenue; Stephanie Madson, Pacific Seafood
Processors; Reed Stoops, Lobbyist, Ocean Beauty Seafoods;
Dean Guaneli, Chief Assistant Attorney General, Department
of Law; Janson Hooley, Staff, Senator Fred Dyson; Senator
Bettye Davis
PRESENT VIA TELECONFERENCE
Kris Norosz, Icicle Seafoods, Petersburg; Stacy Kraly,
Assistant Attorney General, Department of Law;
Dr. Richard Mandsager, Director, Division of Public Health,
Department of Health and Social Services; Devon Mitchell,
Executive Director, Alaska Municipal Bond Bank Authority,
Department of Revenue.
SUMMARY
SB 153 "An Act relating to international airports revenue
bonds; and providing for an effective date."
SB 153 was REPORTED out of Committee with a "do
pass" recommendation and with the accompanying
fiscal impact note by the Department of Revenue.
CSSB 22(FIN)
"An Act adding birthing centers to the list of
health facilities eligible for payment of medical
assistance for needy persons."
CSSB 22 (FIN) was REPORTED out of Committee with a
"no recommendation" recommendation and with a zero
fiscal impact note by the Department of Health and
Social Services.
CSSB 164 (FIN)
"An Act relating to the salmon product development
tax credit; providing for an effective date by
amending an effective date in sec. 7, ch. 57, SLA
2003; and providing for an effective date."
CSSB 164 (FIN) was REPORTED out of Committee with
a "no recommendation" recommendation and with a
zero fiscal impact note by the Department of
Revenue.
CSSB 135(JUD)(efd am)
"An Act relating to the crimes of assault and
custodial interference; and providing for an
effective date."
CSSB 135 (JUD) was REPORTED out of Committee with
a "no recommendation" recommendation and with
three zero fiscal impact notes: #1 ADM, #2 ACS,
#3 LAW.
HB 68 "An Act making capital appropriations and
appropriations to capitalize funds; and providing
for an effective date."
HB 68 was heard and HELD in Committee for further
consideration.
SB 73 "An Act relating to a lease-purchase agreement for
the construction, equipping, and financing of a
state virology laboratory in Fairbanks, on land
provided by the University of Alaska, Fairbanks,
to be operated by the Department of Health and
Social Services; relating to the issuance of
certificates of participation for the laboratory;
relating to the use of certain investment income
for certain construction and equipment costs for
the laboratory; and providing for an effective
date."
CS SB 73 (FIN) am was reported out of Committee
with a "no" recommendation and with previously
published fiscal notes: #1 - Rev, #2 - HSS, and #4
- HSS.
8:49:36 AM
[Due to audio problems, this portion of the meeting can be
heard by going to KTOO's website and selecting the Gavel to
Gavel recording.]
SENATE BILL NO. 153
"An Act relating to international airports revenue
bonds; and providing for an effective date."
NONA WILSON, LEGISLATIVE LIAISON, DEPARTMENT OF
TRANSPORTATION AND PUBLIC FACILITIES, noted that she is
available for questions on SB 153.
Representative Foster MOVED to report SB 153 out of
Committee with individual recommendations and the
accompanying fiscal impact note. There being NO OBJECTION,
it was so ordered.
SB 153 was REPORTED out of Committee with a "do pass"
recommendation and with the accompanying fiscal impact note
by the Department of Revenue.
8:51:24 AM
HOUSE BILL NO. 68
"An Act making capital appropriations and
appropriations to capitalize funds; and providing for
an effective date."
CHERYL FRASCA, DIRECTOR, DIVISION OF MANAGEMENT & BUDGET,
OFFICE OF THE GOVERNOR, explained the changes to SB 68. She
noted the priorities included in the budget.
8:53:45 AM
Co-Chair Meyer asked if the Senate Capital budget included
the museum archives library building in the Department of
Education budget. Ms. Frasca responded that it did not.
8:54:33 AM
Co-Chair Meyer asked about repairs on the Governor's mansion
and the Juneau Pioneer's Home expenses. Ms. Frasca
commented about possible options.
Co-Chair Meyer asked about a recent amendment. Ms. Frasca
replied that it would be a match from the private sector.
Co-Chair Meyer inquired about the Fairbanks Virology Lab.
Ms. Frasca noted that it is being completed by a certificate
of participation whose first payment isn't due until FY 07.
Co-Chair Meyer asked about the Bethel Readiness Center. Ms.
Frasca noted that general funds were appropriated to
complete the state's match for the federal funds.
8:56:58 AM
Co-Chair Meyer inquired about the integrated science complex
differences. Ms. Frasca replied that they worked from the
University Board of Regents' list.
Co-Chair Meyer asked if the university projects on page 39
are in Senate's capital budget. Ms. Frasca said some of
them are.
8:59:10 AM
Co-Chair Chenault asked if the Palmer Court House expansion
is in District 12. Vice-Chair Stoltze responded that it is.
Co-Chair Meyer asked how much is in the general fund. Ms.
Frasca replied $53.5 million.
HB 68 was HELD in Committee for further consideration.
9:01:19 AM
CS FOR SENATE BILL NO. 22(FIN)
"An Act adding birthing centers to the list of health
facilities eligible for payment of medical assistance
for needy persons."
RICHARD BENAVIDES, STAFF, SENATOR BETTYE DAVIS, explained SB
22 would add birthing center fees to Medicaid
reimbursements.
9:03:07 AM
Co-Chair Chenault asked about fiscal note #2 by the
Department of Health and Social Services. He noted that
there is a great deal of uncertainty in calculating the cost
differential between birth center and hospital births. Mr.
Benavides explained problems that result from complicated
births.
Representative Hawker asked if birthing centers are eligible
for Medicaid. Mr. Benavides replied that if they were
approved they would be. Representative Hawker suggested
that this should be figured out first.
9:05:29 AM
JERRY FULLER, MEDICAID DIRECTOR, DEPARTMENT OF HEALTH AND
SOCIAL SERVICES, explained Medicaid services and how
approval is obtained. He explained the intent of the bill.
Representative Hawker referred to spies and the risks of
adding this authority in statute if Medicaid says no. Mr.
Fuller clarified the intent of the second part of the
amendment. The language needs clarification.
Representative Hawker suggested legal clarification
regarding an alternative to existing Medicaid coverage. Mr.
Benavides pointed out that that was the intent, so it is not
open to a need to use general funds. Representative Hawker
emphasized that it is unclear and needs work.
9:09:29 AM
Representative Croft noted that in the statute "if" is the
key to understanding the intent. He implied that it is
clear that birthing centers are a health facility only if
the plan is approved. Representative Hawker asked for legal
clarification on the state and federal regulations. Mr.
Benavides suggested that there is no such person who could
speak to both regulations, and the CS takes care of the
problem.
9:11:11 AM
Representative Holm inquired if the state, by reference, is
giving birthing center stays equal status to a hospital
stay, especially regarding C-sections. He wondered about
liability in that situation. Mr. Benavides replied that
birthing centers work out that situation with the closest
medical facility and assume that risk. Representative Holm
restated his question. Mr. Benavides said birthing center
births are comparable to births at a hospital.
Mr. Fuller added that he does not believe there is any
difference between liability of home births and birthing
center births. Representative Holm said it indicates that
there is a possible financial burden on the state.
9:14:56 AM
Representative Kelly asked if the law is necessary for the
program to continue. He asked why the law is needed in
advance of program approval. Mr. Benavides replied that
nothing can be added to Medicaid programs unless it has been
approved by the legislature. Birthing centers are growing
in Alaska and this is an attempt to make them eligible for
Medicaid services.
Representative Hawker referred to the optional services list
and opined that the bill does not address it. Mr. Benavides
agreed.
Representative Croft agreed with Representative Kelly's
interpretation about which came first. He opined that the
bill does allow for an option which is not currently
offered.
9:19:19 AM
Representative Kelly asked if this bill covers mid-wife
delivery. Mr. Benavides explained that the bill does not
address home birth services, because that is already
covered. It addresses the birthing facility, which is
currently not covered.
Vice-Chair Stoltze noted that it contains a zero fiscal note
with red flags.
Co-Chair Meyer wondered if a letter of intent would be
helpful.
9:21:46 AM
Representative Hawker noted that Medicaid is already paying
for more than half of all births in Alaska. He said he is
not in favor of expanding this service.
SB 22 was set aside for later consideration.
9:23:17 AM
CS FOR SENATE BILL NO. 164(FIN)
"An Act relating to the salmon product development tax
credit; providing for an effective date by amending an
effective date in sec. 7, ch. 57, SLA 2003; and
providing for an effective date."
TIM BERRY, STAFF, SENATOR BERT STEDMAN, explained that the
bill would give salmon processors an additional three years
to claim a tax credit. He read the sponsor statement (copy
on file.)
9:25:36 AM
Vice-Chair Stoltze asked about the effective date of 2012.
CHUCK HARLAMERT, REVENUE AUDIT SUPERVISOR, TAX DIVISION,
DEPARTMENT OF REVENUE, explained that the basic credit is
extended to 2008, but the carryover period is extended to
2012. Vice-Chair Stoltze asked if it is capped at $1
million a year. Mr. Harlamert replied that there is not a
cap on the credit itself. The entire unused credit would be
carried over.
9:27:55 AM
Vice-Chair Stoltze asked about the difference in pop-top
cans and the old cans. Mr. Berry explained that a normal
can requires a can opener. The change was requested by the
processors.
Representative Kelly asked why this date is extended beyond
the previous sunset date. Mr. Berry replied that the
processors have taken a while to learn about the credit.
Mr. Harlamert added that it was a request from the Salmon
Task Force.
Representative Kelly asked about outcomes of the bill. Mr.
Harlamert explained about the investments attributed to the
tax credit. Mr. Berry added that processors have testified
in support of the tax credit and the advantages it has
allowed them. Representative Kelly asked if the tax credit
would be gone in three years. Mr. Berry said it is not the
intention of the sponsor to extend it beyond three years.
9:32:38 AM
Representative Hawker noted that he was a very strong
supporter of the original legislation. It did not include
the idea of new packaging products, which is a fundamental
capital investment. He noted that this is a concern of his.
He said he cannot support any new fiscal notes.
Vice-Chair Stoltze MOVED to ADOPT Conceptual Amendment 1, on
page 2, delete lines 9 and 10. Representative Hawker
OBJECTED.
9:35:38 AM
At ease.
9:37:13 AM
Mr. Harlamert noted that under current law new canning
equipment does qualify for the credit. This bill precludes
a credit for that.
Co-Chair Meyer asked if the extension could be reduced to
two years. Mr. Berry responded that three years would allow
processors to do long-range planning.
9:39:00 AM
Vice-Chair Stoltze WITHDREW Conceptual Amendment 1.
Representative Kelly inquired about extending it only one
year.
9:39:55 AM
Representative Hawker questioned the benefit of the bill and
said he is comfortable extending the credit for one year.
9:40:34 AM
At ease.
9:41:06 AM
STEPANIE MADSON, PACIFIC SEAFOOD PROCESSORS, spoke about the
pop-top can issue as it relates to the tax credit. She
encouraged the Committee to leave pop-tops in the bill.
Vice-Chair Stoltze asked for comment about the sunset date.
Ms. Madson said one year would be better than none, but
three years would be best.
9:44:34 AM
KRIS NOROSZ, ICICLE SEAFOODS, PETERSBURG, (via
teleconference) referred to a letter of support for SB 164
(copy on file.) She discussed one of the projects and a
reason to extend the program for longer than one year.
9:47:20 AM
REED STOOPS, LOBBYIST, OCEAN BEAUTY SEAFOOD, related how the
company uses the credit. He noted that 40 new seasonal jobs
were added. He spoke in favor of SB 164.
Co-Chair Meyer said he is comfortable with the 3-year
extension. Vice-Chair Stoltze agreed.
9:49:43 AM
Representative Hawker MOVED to ADOPT Conceptual Amendment 2,
which would delete all language except that relating to the
salmon tax credit extension date of three years. Co-Chair
Meyer OBJECTED.
Representative Hawker explained his reasons for the
amendment.
Representative Joule asked for clarification of the intent
of the bill.
9:52:33 AM
Mr. Berry responded that the intent is indeed to expand
markets and create new ones.
9:53:43 AM
Mr. Harlamert clarified the intent of the amendment. Some
of the language is to clarify existing law and keep
taxpayers out of trouble. Thirty percent of credit claims
fail because existing statute is insufficiently written.
Representative Moses noted that fish taxes are shared with
local governments. Mr. Harlamert replied that the credit
comes entirely out of the states share and does not affect
local governments.
Representative Kelly stated a concern that Conceptual
Amendment 2 would delete the tightening up of the statute,
which is necessary.
9:57:27 AM
Representative Hawker WITHDREW Conceptual Amendment 2.
Representative Foster MOVED to report CSSB 164 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal impact note. There being NO OBJECTION,
it was so ordered.
CSSB 164 (FIN) was REPORTED out of Committee with a "no
recommendation" recommendation and with a zero fiscal impact
note by the Department of Revenue.
CS FOR SENATE BILL NO. 22(FIN)
"An Act adding birthing centers to the list of health
facilities eligible for payment of medical assistance
for needy persons."
9:59:54 AM
Representative Hawker requested a legal opinion about the
fiscal notes and an assurance that this bill would do no
more than offer an alternative to the existing Medicaid
obligations.
SENATOR BETTYE DAVIS, sponsor, stated that the manner in
which the bill is written, will give the department an
opportunity to ask for an amendment to the state plan. It
does not obligate the state to do anything.
10:01:24 AM
STACY KRALY, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW,
(via teleconference) explained that testimony by Senator
Davis was correct. There would not be a federal Medicaid
match unless the services were authorized under the state
plan.
10:02:17 AM
Representative Hawker reiterated his query. He wondered if
this legislation would create a new, expanded Medicaid
service. Ms. Kraly replied that the way that the proposal
was being offered, it would be in lieu of a hospital stay.
It would not be an expansion of a service, there would not
be an additional service, but rather an offset.
10:03:42 AM
Senator Davis added that the bill is an opportunity to
provide a choice of using birthing centers for delivery.
The facility fee would cost less than it would cost in a
hospital. The services would be paid for regardless, and
would not obligate the state for any other monies. She
stressed that nothing will happen on the bill at this time,
and that she expected members to pass the bill.
10:05:56 AM
Representative Foster MOVED to report CSSB 22 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note.
CSSB 22 (FIN) was REPORTED out of Committee with a "no
recommendation" recommendation and with a zero fiscal impact
note by the Department of Health and Social Services.
10:06:40 AM
CS FOR SENATE BILL NO. 135(JUD)(efd am)
"An Act relating to the crimes of assault and custodial
interference; and providing for an effective date."
JASON HOOLEY, STAFF, SENATOR FRED DYSON, read the sponsor
statement (copy on file.)
10:07:52 AM
Representative Hawker noted a House amendment by
Representative Berkowitz. He asked if that amendment had
been considered.
Mr. Hooley asked which amendment that was. No one
remembered. Representative Hawker explained that it was a
hand-written amendment by Representative Berkowitz.
10:08:54 AM
Representative Joule offered to find the amendment.
10:09:25 AM
At ease.
10:16:15 AM
Representative Hawker MOVED to ADOPT Amendment #1:
Delete lines 13-14 on page 1
Delete lines 1-2 on page 2
Insert on page 1, line 13, following "injury"
"causes disfigurement, impairment of health, or loss or
impairment of the function of a body member or organ."
Co-Chair Meyer OBJECTED for discussion purposes.
Representative Hawker read the amendment.
DEAN GUANELI, CHIEF ASSISTANT ATTORNEY GENERAL, DEPARTMENT
OF LAW, testified regarding the amendment. He explained the
bill regarding assaults against children. The current law
reads that if a person causes physical injury to a child
under ten, and the injury requires medical care, it is a
felony assault. The law attempts to take action so that the
person will get supervision. The next step is often the
killing of a child. He related a case that caused a need
for the bill.
He did not think that a misdemeanor level of regard was
appropriate. The Court of Appeals said that the current
language is not triggered by diagnostic procedures. That
was not the legislative intent with passage of the
legislation.
10:21:13 AM
Vice-Chair Stoltze stated that the legislation addresses
assaulting a defenseless child. Mr. Guaneli replied that
the shaken baby syndrome causes severe injuries, which this
bill would also address.
10:22:08 AM
Representative Hawker opined that the amendment is
appropriate and does accomplish the intent of the bill. It
allows for clear criteria.
10:23:26 AM
Mr. Guaneli replied that current law requires proof of
physical injury. It would have to be proven that the child
was impaired and that level injury caused needed medical
attention. The issue is whether some form of medical
treatment is required. Current law requires proof that the
child was injured. He opined that the amendment would not
further the purpose of the legislation.
10:25:19 AM
Representative Hawker WITHDREW Amendment #1.
10:25:35 AM
Representative Foster MOVED to report CSSB 135 (JUD) out of
Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CSSB 135 (JUD) was REPORTED out of Committee with a "no
recommendation" recommendation and with three zero fiscal
impact notes: #1 ADM, #2 ACS, #3 LAW.
RECESSED: 10:26 A.M.
RECONVENED: 11:07:55 PM.
(Audio restored)
CS FOR SENATE BILL NO. 73(FIN) am
An Act relating to a lease-purchase agreement for the
construction, equipping, and financing of a state
virology laboratory in Fairbanks to be operated by the
Department of Health and Social Services; relating to
the issuance of certificates of participation for the
laboratory; relating to the use of certain investment
income for certain construction and equipment costs for
the laboratory; and providing for an effective date.
DR. RICHARD MANDSAGER, DIRECTOR, DIVISION OF PUBLIC HEALTH,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, spoke in support
of the legislation. He explained that the Governor
introduced the legislation in order to build a virology
laboratory in Fairbanks. The laboratory is part of the
public health system for the state. It is currently housed
in part of an old building on the University of Alaska
Fairbanks campus. He recounted occurrences, which required
quick analysis of laboratory samples, such as during
Iditarod Norovirus outbreak and a measles outbreak in
Juneau. He emphasized the importance of early diagnosis of
infections diseases. The Senate has proposed that the
replacement come as a capital project.
11:11:57 PM
Representative Stoltze noted that the originally legislation
mentioned land from the University of Alaska. Dr. Mandsager
explained that the initial bill provided that land would be
available from the University of Fairbanks for lease at no
cost. The legislation was broadened to allow the project to
occur somewhere else in Fairbanks if it is funded. The
intent is still to obtain land for lease at no cost.
Representative Stoltze questioned the location. Dr.
Mandsager noted that the department had previously
recommended Anchorage. The Public Health laboratory was
built in Anchorage with additional space, but since 911 the
extra space in Anchorage has been taken for prevention
efforts.
In response to a question by Representative Stoltze, Mr.
Mandsager explained that Fairbanks was recommended due to
the close proximity to the University of Alaska, Fairbanks.
The laboratory would add capacity as a basic safety
laboratory level three facility that can be dual used by the
department and the university. He added that the virological
staff would be hard to replace [if it were moved from
Fairbanks] and noted that earthquake threat and other
disaster response would be spread between two cities.
Discussions occurred with the university and the department,
which resulted in the recommendation of Fairbanks.
11:16:03 PM
DEVON MITCHELL, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL BOND
BANK AUTHORITY, DEPARTMENT OF REVENUE, explained that the
project would be financed through a certificate of
participation, which would create a lease by giving a
trustee bank the title interest of the facility. The
department would enter into a lease agreement with the
trustee bank. The lease revenue stream becomes the security
and the certificate of participation is in the lease. They
are looking at a 15-year-term rate, with a 4.9 percent
interest schedule (which is 80 - 90 basis points over
current market) and annual debt in the $2.3 - $2.4 million
dollar range. Other facilities have been funded by the same
funding mechanism such as: the Department of Environmental
Conservation Seafood, Food Safety laboratory, the Department
of Health and Social Services laboratory in Anchorage, and a
number of courthouses and prisons. It would have an impact
on the state of Alaska's general fund, but he did not think
it would adversely impact the state's credit rating.
11:18:58 PM
Mr. Mitchell spoke to the interest rate. He acknowledged
that the interest rate in the legislation is "perhaps" at a
more optimistic level than that put forth with GARVEE bonds.
The are mitigating factors, which resulted in a more awkward
certification of participation with the GARVVEE bonds.
11:19:51 PM
Representative Stoltze observed that the Governor's
assumption was for a long-term lease at no cost.
Mr. Mitchell suggested that the Administration is still
looking at land owned by the state of Alaska. He did not
know what development costs would be associated with another
site. He acknowledged that there could be unforeseen
obstacles.
11:21:06 PM
Representative Weyhrauch asked if there had been a cost
benefit analysis of building a laboratory, as opposed to
gold streaking samples. Dr. Mandsager noted that they had
not done a cost analysis. He noted that samples from the
southeast area of the state would not pose a problem, but
that samples from the central region and other areas would
have considerable amount of time added. He cautioned that
the length of time it takes to get samples tested could
become important in relationship to bird flu (if it is every
transmitted to humans). He spoke in support of instate
services.
Mr. Mandsager observed that the types of tests that are done
at the laboratory are not done at hospitals in the state.
Influenza testing is done at public health laboratories.
Time is at issue and delays could create problems. Tests for
rabies occur once every couple of weeks.
11:24:03 PM
In response to a question by Representative Chenault, Dr
Mandsager emphasized "they are building what is necessary
and no more". The proposed size is smaller than some of the
program people have argued for. Professionals from other
states, which looked at the state of Alaska's test volume
and capacity, felt that the proposed laboratory would be the
minimum size to meet the state's needs. He thought it was a
"Chevy" [not a "Cadillac].
Representative Chenault referred to page 2, of the handout.
He noted that 36,267 specimens were tested in FY04.
11:26:28 PM
Representative Holms MOVED to report CSSB 73 (FIN) am out of
Committee with the accompanying fiscal note.
ADJOURNMENT
The meeting was adjourned at 11:28 PM
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