Legislature(2005 - 2006)HOUSE FINANCE 519

05/09/2005 08:30 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to a Call of the Chair --
+= SB 153 INTERNATIONAL AIRPORTS REVENUE BONDS TELECONFERENCED
Moved Out of Committee
+ SB 22 MEDICAID COVERAGE FOR BIRTHING CENTERS TELECONFERENCED
Moved Out of Committee
+ SB 164 SALMON PRODUCT DEVELOPMENT TAX CREDIT TELECONFERENCED
Moved Out of Committee
+ SB 135 ASSAULT & CUSTODIAL INTERFERENCE TELECONFERENCED
Moved Out of Committee
+= HB 68 APPROP: CAPITAL BUDGET TELECONFERENCED
Heard & Held
+= SB 73 STATE VIROLOGY LABORATORY TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled 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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