Legislature(2019 - 2020)ADAMS 519

03/22/2020 11:00 AM House FINANCE

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-- Continued from 03/21/20 --
Heard & Held
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+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                      March 22, 2020                                                                                            
                        11:33 a.m.                                                                                              
[Note: continuation of March 21, 2020 meeting.]                                                                                 
11:33:59 AM                                                                                                                   
CALL TO ORDER                                                                                                                 
Co-Chair  Johnston   called  the  House   Finance  Committee                                                                    
meeting to order at 11:33 a.m.                                                                                                  
MEMBERS PRESENT                                                                                                               
Representative Neal Foster, Co-Chair                                                                                            
Representative Jennifer Johnston, Co-Chair                                                                                      
Representative Dan Ortiz, Vice-Chair                                                                                            
Representative Ben Carpenter                                                                                                    
Representative Andy Josephson                                                                                                   
Representative Gary Knopp                                                                                                       
Representative Bart LeBon                                                                                                       
Representative Kelly Merrick (via teleconference)                                                                               
Representative Colleen Sullivan-Leonard                                                                                         
Representative Cathy Tilton                                                                                                     
Representative Adam Wool                                                                                                        
MEMBERS ABSENT                                                                                                                
ALSO PRESENT                                                                                                                  
Darwin  Peterson,  Staff,  Click  Bishop;  Chad  Hutchinson,                                                                    
Staff, Senate Majority; Senator  David Wilson, Sponsor; Gary                                                                    
Zepp,  Staff,  Senator   David  Wilson;  Elizabeth  Rexford,                                                                    
Staff,  Senator   Donny  Olson;  Kris   Curtis,  Legislative                                                                    
Auditor,  Alaska  Division  of  Legislative  Audit;  Senator                                                                    
Donny Olson, Sponsor; Jasmin  Martin, Staff, Senator Wilson;                                                                    
Nancy Meade, General Counsel, Alaska Court System.                                                                              
PRESENT VIA TELECONFERENCE                                                                                                    
Brent  Goodrum, Deputy  Commissioner, Department  of Natural                                                                    
Resources;   Ramona  Monroe,   Alaska  Miners   Association,                                                                    
Anchorage;   Karl  Hanneman,   Alaska  Miners   Association,                                                                    
Anchorage; Albert  Wall, Deputy Commissioner,  DHSS, Juneau;                                                                    
Jared Kosin,  President and Chief Executive  Officer, Alaska                                                                    
State  Hospital  and  Nursing Home  Association,  Anchorage;                                                                    
Robin  Minard,   Mat-Su  Health  Foundation,   Wasilla;  Jon                                                                    
Zasada,  Policy Integration  Director,  Alaska Primary  Care                                                                    
Association,  Anchorage;  Don   Black,  Executive  Director,                                                                    
Bethel Family  Clinic, Bethel; Eric Boyer,  Program Officer,                                                                    
Alaska  Mental Health  Trust  Authority, Anchorage;  Sevilla                                                                    
Love,   Integration   Coordinator,   Alaska   Primary   Care                                                                    
Association,   Anchorage;  Prentice   Pemberton,  Counseling                                                                    
Solutions  of  Alaska, Anchorage;  Gennifer  Moreau-Johnson,                                                                    
Director,  Division  of  Behavioral  Health,  Department  of                                                                    
Health  and Social  Services;  Melissa Hill,  Administrative                                                                    
Operations  Manager,  Division   of  Health  Care  Services,                                                                    
Department  of Health  and Social  Services; Charles  McKee,                                                                    
Self, Anchorage; Representative Kelly Merrick.                                                                                  
CSSB 55(2nd JUD)                                                                                                                
          APPOINTMENTS TO COURT OF APPEALS                                                                                      
          CSSB 55(2nd JUD) was HEARD and HELD in committee                                                                      
          for further consideration.                                                                                            
CSSB 115(FIN)(efd fld)                                                                                                          
          MOTOR FUEL TAX; EV REG. FEE                                                                                           
          CSSB 115(FIN)(efd fld) was HEARD and HELD in                                                                          
          committee for further consideration.                                                                                  
SB 134    MEDICAID COVERAGE OF LIC. COUNSELORS                                                                                  
          SB 134 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
CSSSSB 155(RES)                                                                                                                 
          EXPLORATION & MINING RIGHTS; ANNUAL LABOR                                                                             
          CSSSSB 155(RES) was HEARD and HELD in committee                                                                       
          for further consideration.                                                                                            
CSSB 172(L&C)                                                                                                                   
          EXTENDING THE STATE MEDICAL BOARD; AUDIT                                                                              
          CSSB 172(L&C) was HEARD and HELD in committee for                                                                     
          further consideration.                                                                                                
Co-Chair Johnston reviewed the agenda for the meeting.                                                                          
CS FOR SENATE BILL NO. 115(FIN)(efd fld)                                                                                      
     "An Act relating to vehicle registration fees; and                                                                         
     relating to the motor fuel tax."                                                                                           
11:35:09 AM                                                                                                                   
Co-Chair Johnston  indicated the committee would  be hearing                                                                    
SB 115 first.                                                                                                                   
Co-Chair Johnston OPENED Public Testimony.                                                                                      
Co-Chair Johnston CLOSED Public Testimony.                                                                                      
DARWIN  PETERSON,  STAFF,  CLICK BISHOP,  provided  a  brief                                                                    
review of the  legislation. SB 115 proposed  to increase the                                                                    
highway motor  fuel tax from  $.08 cents to $.16  cents. The                                                                    
original legislation  proposed to  increase the  marine fuel                                                                    
tax from  $.05 cents to  $.10 cents. The amendment  that was                                                                    
added  to the  bill  in the  House Transportation  Committee                                                                    
provided  a refund  for commercial  fishermen.  In order  to                                                                    
receive a refund  of $.05 cents per  gallon, fishermen would                                                                    
be required  to send in  their fuel  receipts at the  end of                                                                    
the year.                                                                                                                       
Mr.  Peterson  reported that  the  bill  did not  propose  a                                                                    
change for  aviation or  jet fuel. He  spoke about  the off-                                                                    
road  refund.  In current  statutes  if  a person  purchased                                                                    
highway  gasoline   for  off-road  vehicles  such   as  snow                                                                    
machines and  4-wheelers, they could send  in their receipts                                                                    
for a  refund of $.06  per gallon. The  legislation proposed                                                                    
to  increase the  refund amount  for  off-road vehicle  fuel                                                                    
from  $.06 cents  to  $.12  cents. He  was  directed by  the                                                                    
sponsor to request that the  committee consider amending the                                                                    
bills  effective date.  Currently, the legislation reflected                                                                    
an  effective date  of  July  1, 2020.  Due  to the  current                                                                    
COVID-19 disaster,  he respectfully requested  the committee                                                                    
consider extending the effective date to January 1, 2021.                                                                       
Co-Chair  Johnston  replied  that  the  committee  would  be                                                                    
taking up  amendments. She reported there  were 4 amendments                                                                    
submitted for consideration.                                                                                                    
11:38:32 AM                                                                                                                   
Vice-Chair Ortiz MOVED to ADOPT Amendment 1, 3l-LS0895\E. l                                                                     
Nauman 3/17/20 (copy on file):                                                                                                  
     Page 2, following line 22:                                                                                                 
     Insert a new bill section to read:                                                                                         
     * Sec. 3. AS 43.40.00S(a) is amended to read:                                                                              
     (a) Every dealer or user of refined fuels shall pay a                                                                      
     surcharge of $.015 [$.0095] a gallon on refined fuel                                                                       
     sold, transferred, or used in the state."                                                                                  
     Renumber the following bill sections accordingly.                                                                          
Co-Chair Johnston OBJECTED for discussion.                                                                                      
Representative  Josephson explained  the  amendment added  a                                                                    
tax of  55/100 cents per  gallon to the purchase  of refined                                                                    
fuel.  The funds  would be  used for  making the  prevention                                                                    
account whole  in the  out years  from the  Spill Prevention                                                                    
and Response Division.  He borrowed the concept  from a bill                                                                    
offered  in  2015  by  Senator  Micciche.  The  Senator  had                                                                    
increased the  tax by $.0095  cents to support  the division                                                                    
which received a significant amount  of its revenue from the                                                                    
funding.  The revenue  had declined  because cars  were more                                                                    
efficient  and because  throughput had  declined, which  was                                                                    
another source of  revenue for the department.  He called it                                                                    
the "one  latte" tax because  it would cost about  $5.00 per                                                                    
year for the average driver. He  was told by the sponsor and                                                                    
the  administration  that  they  were  not  opposed  to  the                                                                    
Representative  Carpenter asked  how much  revenue a  tax of                                                                    
$5.00  per  year  per  person   would  generate  each  year.                                                                    
Representative  Josephson responded  that it  would generate                                                                    
additional revenue of $3.8 million.                                                                                             
Representative Knopp  asked if the  funding would go  to the                                                                    
Department  of Environmental  Conservation  (DEC) for  spill                                                                    
response. Representative  Josephson responded affirmatively.                                                                    
He noted  that the concept  had already been applied  in the                                                                    
2015 legislation he mentioned.  If the amendment passed, the                                                                    
state  would  spend less  to  regulate  and prevent  spills.                                                                    
Otherwise, the money  would have to come out  of the states                                                                     
treasury.  Currently,   the  fund  could  not   sustain  the                                                                    
division past  2024. The fund  would simply be  depleted. He                                                                    
cited the example of class  2 tank farms. The administration                                                                    
wanted  to  terminate  7   positions,  reduce  training  for                                                                    
responders  and staff,  and reduce  its regulation  of long-                                                                    
term soil  and water  contamination among other  things. The                                                                    
effect was already being felt.                                                                                                  
Representative  Knopp asked  why  the fund  was in  decline.                                                                    
Representative  Josephson replied  that  it had  to do  with                                                                    
people  purchasing hybrid  cars  and  because of  throughput                                                                    
declining  from  550,000  to 480,000  barrels  per  day  and                                                                    
11:43:54 AM                                                                                                                   
Vice-Chair  Ortiz added  that, with  the gradual  erosion of                                                                    
revenue, it had been projected  that the spill response fund                                                                    
would be at zero by 2024.                                                                                                       
Representative  Knopp  did  not understand  the  correlation                                                                    
with throughput because it was not a refined product.                                                                           
Representative Josephson  understood that, starting  in 1986                                                                    
and adjusted after  the oil spill in 1989, there  was a $.05                                                                    
cent surcharge on throughput. One  cent per barrel went into                                                                    
the spill response fund which was  designed to be used for a                                                                    
massive  Exxon-Valdez type  of problem.  The remaining  $.04                                                                    
cents went into the  spill prevention account. The amendment                                                                    
would supplement the prevention side.                                                                                           
Representative Wool  wanted to  make sure he  understood the                                                                    
amendment and  provided what he  thought were the  terms. He                                                                    
wondered   about  the   total   amount   of  refined   fuel.                                                                    
Representative   Josephson   thought  Mr.   Peterson   could                                                                    
respond. Mr.  Peterson asked  Representative Wool  to repeat                                                                    
his question. Representative Wool restated his question.                                                                        
Mr. Peterson indicated that the  additional increase of $.08                                                                    
cents  per gallon  plus  $.05 cents  for  marine fuel  would                                                                    
bring in  an estimated  amount of $34  million. He  though a                                                                    
half-cent would  bring in  about $3  million to  $4 million.                                                                    
Heating  fuel was  exempt from  the tax.  He indicated  that                                                                    
there were additional exemptions as well.                                                                                       
Representative Wool  thought the total revenue  from the tax                                                                    
would   be  about   $2  million.   Representative  Josephson                                                                    
responded that  it was  $3.8 million  and the  total gallons                                                                    
taxed was roughly 695 million gallons in Alaska.                                                                                
Co-Chair Johnston WITHDREW her OBJECTION.                                                                                       
Representative Carpenter OBJECTED.                                                                                              
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: Josephson, Knopp, LeBon, Ortiz, Wool, Johnston,                                                                       
OPPOSED: Merrick, Sullivan-Leonard, Tilton, Carpenter                                                                           
The MOTION to ADOPT Amendment 1 PASSED (7/4).                                                                                   
11:50:32 AM                                                                                                                   
Representative   LeBon   MOVED    to   ADOPT   Amendment   2                                                                    
31-LS0895\E.3 Nauman 3/20/20 (copy on file):                                                                                    
     Page 1, line l, following "registration":                                                                                  
     Insert "and registration"                                                                                                  
     Page 1, following line 2:                                                                                                  
     Insert new bill sections to read:                                                                                          
     "* Section 1. AS 28.10.155(a) is amended to read:                                                                          
     (a)  Except as  provided in  {c) of  this section,  the                                                                    
     [THE]  owner  of  a  motor  vehicle  [,  OTHER  THAN  A                                                                    
     COMMERCIAL  MOTOR  VEHICLE,]  that is  required  to  be                                                                    
     registered  under this  chapter may  elect to  register                                                                    
     the motor  vehicle permanently in lieu  of registration                                                                    
     under AS  28.10.108 if  the vehicle  is at  least eight                                                                    
     years  old and  the  owner resides  in the  unorganized                                                                    
     borough or  in a  municipality that elects,  by passage                                                                    
     of  an appropriate  ordinance, to  allow the  permanent                                                                    
     registration   of   motor   vehicles.   The   permanent                                                                    
     registration  expires  when   the  owner  transfers  or                                                                    
     assigns the  owner's title or interest  in the vehicle.                                                                    
     A  permanent  registration  may   not  be  renewed.  On                                                                    
     receiving   the  proper   application  and   fees,  the                                                                    
     department   shall  issue   to  the   registered  owner                                                                    
     registration    plates,   tabs,    and   a    permanent                                                                    
     registration form.                                                                                                         
     *  Sec.  2.  AS  28.10.155 is  amended  by  adding  new                                                                    
     subsections to read:                                                                                                       
     (c)  The  following  vehicles   are  not  eligible  for                                                                    
     permanent registration under (a) of this section:                                                                          
     (1) commercial motor vehicles;                                                                                             
     (2) electric vehicles;                                                                                                     
     (3) plug-in hybrid vehicles;                                                                                               
     (4) vehicles powered by an alternative fuel and                                                                            
     manufactured primarily for use on public roads.                                                                            
     (d) In this section,                                                                                                       
     (1) "alternative fuel" includes hydrogen and natural                                                                       
     (2) "electric vehicle" and "plug-in hybrid vehicle"                                                                        
     have the meanings given in AS 28.10.42l(k)."                                                                               
     Page 1, line 3:                                                                                                            
     Delete "Section 1"                                                                                                         
     Insert "Sec. 3"                                                                                                            
     Renumber the following bill sections accordingly.                                                                          
Co-Chair Johnston OBJECTED for discussion.                                                                                      
Representative LeBon  explained the amendment  would exclude                                                                    
electric    vehicles,   plug-in    hybrid   vehicles,    and                                                                    
alternatively  fueled  vehicles   from  being  eligible  for                                                                    
permanent  registration, known  as  a Z-tag.  The issue  was                                                                    
brought  to   his  attention  by  the   American  Automobile                                                                    
Association (AAA)  who noted the disparity  between vehicles                                                                    
powered  by traditional  motor fuel,  such  as gasoline  and                                                                    
diesel, versus  electric and  hybrid vehicles.  He continued                                                                    
that  when contributing  to  the  highway maintenance  fund,                                                                    
since electric and hybrid vehicles  would be purchasing less                                                                    
motor  fuel  at  the  pump the  bill  raised  the  bi-annual                                                                    
registration  costs for  the vehicles  to  ensure they  were                                                                    
contributing to  the highway maintenance as  users of public                                                                    
roads.  However, current  law  allowed a  person  to buy  an                                                                    
electric vehicle that was more  than 8 years old, purchase a                                                                    
permanent registration  which would be $200  for an electric                                                                    
or hybrid vehicle, plus a  $25 permit registration fee never                                                                    
again having  to contribute towards highway  maintenance. He                                                                    
argued that  by excluding electric, hybrid,  and alternative                                                                    
vehicles   from   permanent   registration   fees,   highway                                                                    
maintenance  costs  could  be recuperated.  Prior  testimony                                                                    
revealed  that the  life span  of a  battery in  an electric                                                                    
vehicle  was   about  8   years.  However,   technology  was                                                                    
anticipated to improve.                                                                                                         
Representative  Josephson  relayed  that  the  bill  already                                                                    
treated  hybrid and  electric cars  differently. He  thought                                                                    
the  bill was  potentially double-dipping  by treating  them                                                                    
differently than  other regular  cars over  8 years  old. He                                                                    
asked if he was accurate.                                                                                                       
Representative LeBon was  looking to not exempt  a hybrid or                                                                    
electric vehicle just  because it reached a  certain age, if                                                                    
it  was still  on  the road.  The goal  was  to continue  to                                                                    
collect a  fee towards  road maintenance  even if  a vehicle                                                                    
reached a certain age. He  argued that an electric or hybrid                                                                    
vehicle should  continue to  contribute to  road maintenance                                                                    
as long as they were on the road.                                                                                               
Representative   Wool   provided   clarity   regarding   the                                                                    
amendment.  He suggested  that  the  basic average  increase                                                                    
would be $50  for a gasoline-powered car.  The difference in                                                                    
the registration fee  for a hybrid or electric  car would be                                                                    
about $50.  He thought the  bill addressed the  inequity and                                                                    
leveled the playing field.                                                                                                      
Co-Chair Johnston WITHDREW her OBJECTION.                                                                                       
Representative Carpenter OBJECTED.                                                                                              
A roll call vote was taken on the motion.                                                                                       
IN  FAVOR: Knopp,  LeBon,  Ortiz, Sullivan-Leonard,  Tilton,                                                                    
Wool, Carpenter, Josephson, Foster, Johnston                                                                                    
OPPOSED: Merrick                                                                                                                
The MOTION to ADOPT Amendment 2 PASSED (10/1).                                                                                  
11:56:18 AM                                                                                                                   
Representative   LeBon   MOVED   to   ADOPT   Amendment   3,                                                                    
31-LS0895\E.4 Nauman 3/20/20 (copy on file):                                                                                    
     Page 3, line 25:                                                                                                           
     Delete "1"                                                                                                                 
     Page 3, line 27:                                                                                                           
     Delete "(A)[(1)]"                                                                                                          
     Insert "(1)"                                                                                                               
     Page 3, line 28:                                                                                                           
     Delete "(B)[(2)]"                                                                                                          
     Insert "(2)"                                                                                                               
     Page 3, line 30:                                                                                                           
     Delete "(C)[(3)]"                                                                                                          
     Insert "(3)"                                                                                                               
     Page 3, line 31:                                                                                                           
     Delete ";or"                                                                                                               
     Insert "."                                                                                                                 
     Page 4, lines 1 - 3:                                                                                                       
     Delete all material.                                                                                                       
Co-Chair Johnston OBJECTED for discussion.                                                                                      
Representative  LeBon  explained   that  Amendment  3  would                                                                    
remove  the language  inserted by  the House  Transportation                                                                    
Committee creating a $.05 cent  per gallon refund for marine                                                                    
fuel tax  paid by  licensed commercial fishing  vessels. The                                                                    
bill  raised tax  on marine  fuel  from $.05  cents to  $.10                                                                    
cents per  gallon. The refund  would essentially  exclude an                                                                    
entire industry  from paying the  increase in the  tax which                                                                    
went to state and municipal  port and harbor maintenance and                                                                    
upgrades which would directly  benefit the fishing industry.                                                                    
He  understood  that  the commercial  fishing  industry  had                                                                    
experienced  many   economic  challenges  even   before  the                                                                    
states  current  array of economic challenges.  He continued                                                                    
that the increase from other  fees was certainly part of the                                                                    
industry. However, he saw the  amendment being about equity.                                                                    
He could  see the  argument for reducing  the amount  of the                                                                    
increase but not  for excluding an entire  industry from the                                                                    
increase  in which  it  would be  a  direct beneficiary.  He                                                                    
spoke with  the sponsors   office and  the sponsor  was okay                                                                    
with the proposed change.                                                                                                       
Representative Knopp asked for  clarity on the amendment. He                                                                    
noted  on  page  4  that  there was  an  exemption  for  the                                                                    
commercial  fishing  fleet.  He  asked about  the  items  on                                                                    
page 3, lines 25, 27, and 28 regarding off-road users.                                                                          
11:59:01 AM                                                                                                                   
Representative  LeBon  responded  that  the  intent  of  his                                                                    
amendment  was  to  address  the  favorable  treatment  that                                                                    
commercial fishermen  would receive from the  $.05 cents per                                                                    
gallon  exemption under  the amendment  passed by  the House                                                                    
Transportation Committee.  His understanding was  that other                                                                    
users  of marine  fuel such  as  charter fishing  operators,                                                                    
tourism operators,  boating operators, barge  operators, and                                                                    
ferry  operators  would  pay   the  $.05  cents  per  gallon                                                                    
surcharge. Commercial  fishermen would enjoy the  ability to                                                                    
apply for  a refund by  sending in their receipts.  He posed                                                                    
the question  whether commercial fishermen were  receiving a                                                                    
benefit.  Currently,  the  way   the  bill  was  structured,                                                                    
commercial  fishermen   would  receive   a  refund   of  the                                                                    
additional  $.05   cents  per  gallon.  If   the  commercial                                                                    
fishermen were not  going to receive a  benefit, he wondered                                                                    
if  other  users such  as  charter  boat operators,  tourism                                                                    
operators   would  receive   a  benefit.   He  thought   the                                                                    
commercial fishermen  would benefit  in some way  and should                                                                    
pay the tax.                                                                                                                    
Vice-Chair   Ortiz   spoke   against  the   amendment.   The                                                                    
commercial  fishing  industry,  under the  current  scenario                                                                    
with  COVID-19, was  facing  a huge  loss  in profits.  When                                                                    
considering a $.05 cents exemption.  However, getting out to                                                                    
the fishing  grounds was  costly in fuel.  He did  not agree                                                                    
with the amendment.                                                                                                             
12:02:11 PM                                                                                                                   
Representative  Knopp  opposed  the amendment.  He  reported                                                                    
that  everything  on  page  3  reflected  existing  language                                                                    
applicable   to   off-road  equipment   including   loaders,                                                                    
graders,  and excavators  used for  road  maintenance or  at                                                                    
mining sites. He read from a  portion of the bill staring on                                                                    
page 3, line 23. He concluded  that the purpose of the motor                                                                    
fuel tax  was to fund  highway maintenance. The  vehicles he                                                                    
was  referring  to  were  not  used  on  highways.  He  also                                                                    
referred  to the  new language  on page 4.  There were  many                                                                    
additional  costs  on  the   commercial  fleet.  He  thought                                                                    
anything that could alleviate the pain would be desirable.                                                                      
Mr.  Peterson replied  that in  his view  the amendment  was                                                                    
deleting the sub  numbers that were inserted  because of the                                                                    
new language  on page 4,  lines 1-3 creating the  refund for                                                                    
commercial   fishermen.  If   the  amendment   sponsored  by                                                                    
Representative  LeBon  were to  pass,  the  refund for  $.12                                                                    
cents per  gallon for  off-road use  would still  apply. The                                                                    
refund  would  apply  for  anyone  who  purchased  fuel  for                                                                    
vehicles used  off-road. The amendment would  delete the new                                                                    
language inserted  by the House Transportation  Committee on                                                                    
page  4,  lines 1-3.  If  the  amendment  were to  pass  the                                                                    
commercial fishing industry would  no longer have the option                                                                    
to  apply  for  a  refund for  the  additional  $.05  cents.                                                                    
However,  the $.12  cent per  gallon  off-road rebate  would                                                                    
remain in the bill.                                                                                                             
12:06:12 PM                                                                                                                   
AT EASE                                                                                                                         
12:07:31 PM                                                                                                                   
Representative  Knopp  had  not  interpreted  the  amendment                                                                    
correctly.  Although  he   had  received  clarification,  he                                                                    
argued that some sectors of  the commercial fishing industry                                                                    
needed some relief. He continued to oppose the amendment.                                                                       
Representative Wool  asked how many other  states provided a                                                                    
different  tax  rate for  marine  versus  highway fuel.  Mr.                                                                    
Peterson responded  that most all  other states  charged the                                                                    
same  excise tax  for marine  fuel as  they did  for highway                                                                    
fuel. Alaska was unique in having two different tax rates.                                                                      
Representative Wool asked if different  rates had applied in                                                                    
Alaska  for a  significant  period.  Mr. Peterson  responded                                                                    
that the  last time the marine  fuel tax was changed  was in                                                                    
1994.  The highway  fuel tax  was changed  last in  1970. In                                                                    
1945,  when Alaska  was still  a territory  and the  tax was                                                                    
created,  he  believed  it  was  $.01  cent  for  both  fuel                                                                    
categories.  He was  unsure when  the legislature  separated                                                                    
highway  fuel tax  from marine  fuel tax  charging different                                                                    
rates.  He  suspected it  was  when  the commercial  fishing                                                                    
industry  came into  existence.  He would  have to  research                                                                    
when the two taxes were separated.                                                                                              
Representative Wool  understood the effects of  the COVID-19                                                                    
virus on  several different industries.  The sponsor  of the                                                                    
amendment  mentioned  other  industries that  would  not  be                                                                    
exempt. He  asked if a  state aid  package was in  the works                                                                    
for the fishing industry.  Co-Chair Johnston thought several                                                                    
relief avenues would be accessible in the near future.                                                                          
12:11:17 PM                                                                                                                   
Mr.  Peterson  reported  speaking  with  Jim  Anderson,  the                                                                    
operations  manager for  investments  at  the Department  of                                                                    
Community and Economic  Development (DCCED). Current statute                                                                    
provides the  department the ability to  defer loan payments                                                                    
and  withhold penalties  for  the  commercial fishing  fleet                                                                    
through  loans provided  by DCCED.  He also  understood that                                                                    
the Alaska  Commercial Fishing  and Agriculture  Bank (CFAB)                                                                    
had  the statutory  authority  to do  so  as well.  Interest                                                                    
would  continue  to accrue,  but  for  the duration  of  the                                                                    
current disaster,  the commercial fishing fleet  could defer                                                                    
payments, particularly  if the commercial fishing  fleet was                                                                    
not  able  to  operate  in  the coming  summer  due  to  the                                                                    
canneries not  opening. He noted  that permits would  not be                                                                    
seized as well.                                                                                                                 
Representative Wool asked about  processors. He asked if the                                                                    
reduction would apply. Mr.  Peterson asked if Representative                                                                    
Wool  was  talking  about  the   amendment  from  the  House                                                                    
Transportation  Committee.   Representative  Wool  responded                                                                    
affirmatively. Mr. Peterson responded  in the negative. [Mr.                                                                    
Peterson was  interrupted with  an additional  question from                                                                    
Representative Wool].                                                                                                           
Representative Wool  asked if the  exemption would  apply to                                                                    
ancillary vessels such as a  tender or a floating processor.                                                                    
Mr. Peterson replied  that the only people  that could apply                                                                    
for the refund were licensed  commercial fishermen who had a                                                                    
Commercial  Fisheries Entry  Commission  (CFEC) license.  He                                                                    
did not believe it would apply to processors.                                                                                   
Representative Wool asked if most  CFEC licenses were issued                                                                    
to  Alaska Residents.  He wondered  about the  percentage of                                                                    
licenses  issued  to  residents  versus  non-residents.  Mr.                                                                    
Peterson  confirmed  there  were  non-residents  who  fished                                                                    
commercially in Alaska but did not know the percentage.                                                                         
Co-Chair Johnston WITHDREW her OBJECTION.                                                                                       
Vice-Chair Ortiz OBJECTED.                                                                                                      
Representative   LeBon    provided   closing    remarks   on                                                                    
Amendment 3. He  thought it  was necessary  to know  how the                                                                    
$.05 cent  per gallon  would benefit  all payers  or whether                                                                    
anyone was  excluded. He  suggested it  was easy  to connect                                                                    
the  dots   on  the  highway  fuel   tax  improving  highway                                                                    
maintenance such as timely snow  removal and roads remaining                                                                    
open 24/7.  He mentioned  a Fairbanks  family-owned trucking                                                                    
business that  was not  opposed to  the additional  tax. The                                                                    
company wanted the  roads to be managed. He  wondered if all                                                                    
parties were being treated fairly.                                                                                              
Vice-Chair Ortiz  remarked that  the captain of  the fishing                                                                    
vessel had  to fill out  and submit the proper  paperwork in                                                                    
order to receive a refund.  He was unsure how many fishermen                                                                    
would actually  submit the proper documentation.  The amount                                                                    
of money the  state would lose was  not calculable. However,                                                                    
he felt  granting the  exemption was  a statement  about how                                                                    
much the industry contributed to Alaskas economy.                                                                               
12:16:58 PM                                                                                                                   
AT EASE                                                                                                                         
12:24:10 PM                                                                                                                   
Representative Tilton  had not seen the  amendments prior to                                                                    
the meeting. She appreciated the  time to consult with other                                                                    
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: LeBon, Wool, Johnston                                                                                                 
OPPOSED:    Merrick,   Ortiz,    Sullivan-Leonard,   Tilton,                                                                    
Carpenter, Josephson, Knopp, Foster                                                                                             
The MOTION to ADOPT Amendment 3 FAILED (3/8).                                                                                   
12:25:54 PM                                                                                                                   
Co-Chair Johnston MOVED to ADOPT Amendment 4, 31-LS0895\E.5                                                                     
Nauman 3/20/20 (copy on file):                                                                                                  
     Page 1, line 5, following "$100,":                                                                                         
     Insert "the owner of a vehicle powered by alternative                                                                      
     fuel shall pay a special biennial registration fee of                                                                      
     Page 1, following line 8:                                                                                                  
     Insert a new paragraph to read:                                                                                            
     "(1) "alternative fuel" includes hydrogen and natural                                                                      
     Renumber the following paragraphs accordingly.                                                                             
Representative Sullivan-Leonard OBJECTED for discussion.                                                                        
Co-Chair Johnston  reviewed the  amendment. She  noted there                                                                    
were  other  alternative  fueled vehicles  being  introduced                                                                    
into the market.  She indicated natural gas  had been around                                                                    
for  a significant  amount of  time  and felt  it should  be                                                                    
included  in the  alternative fuel  special biannual  fee of                                                                    
Representative  Sullivan-Leonard   asked  if  Representative                                                                    
Johnston  had  a figure  of  how  much the  amendment  would                                                                    
generate  in revenue.  Co-Chair  Johnston  responded in  the                                                                    
negative. She  explained that hydrogen-fueled  vehicles were                                                                    
just reaching  the market presently.  They would  be limited                                                                    
to  markets in  San Francisco  and Vancouver.  However, they                                                                    
would  be  coming.  She continued  that  natural  gas-fueled                                                                    
vehicles had come  and gone. She wanted to  ensure that both                                                                    
types of alternative fueled vehicles were included.                                                                             
Representative Wool  replied that since the  legislature did                                                                    
not  know what  the tax  structure  was, he  would be  hard-                                                                    
pressed  to increase  it for  a new  type of  technology not                                                                    
presently in  existence. He asked  if there was  currently a                                                                    
natural gas tax refund related to gas at a residence.                                                                           
Co-Chair  Johnston  replied  that  in  Anchorage  there  was                                                                    
natural gas  and there had  been vehicles fueled  by natural                                                                    
gas including part  of the municipalitys  fleet.  One of the                                                                    
challenges with natural  gas was the length of  time it took                                                                    
to fill up a car.  The municipality converted to natural gas                                                                    
then converted back.  She did not think there  was a natural                                                                    
gas  tax  beyond  what  was   currently  in  place  to  heat                                                                    
residences  and  barbeques.  She  added  that  she  did  not                                                                    
believe there was a natural gas motor fuel tax.                                                                                 
Representative  Knopp supported  the  amendment. He  thought                                                                    
the  sponsor  had  estimated about  600  alternative  fueled                                                                    
vehicles  on  the   road.  He  thought  the   fee  was  very                                                                    
appropriate and  would help to  pay for some of  the states                                                                     
road maintenance.                                                                                                               
Representative Sullivan-Leonard MAINTAINED her OBJECTION.                                                                       
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: Josephson, Knopp, LeBon, Ortiz, Foster, Johnston                                                                      
OPPOSED:  Merrick,    Sullivan-Leonard,     Tilton,    Wool,                                                                    
The MOTION to ADOPT Amendment 4 PASSED (6/5).                                                                                   
12:31:22 PM                                                                                                                   
Co-Chair Johnston  MOVED to ADOPT a  Conceptual Amendment to                                                                    
include an effective  date of January 1, 2021  and to direct                                                                    
Legislative Legal  Services to make any  necessary technical                                                                    
and conforming changes.                                                                                                         
Vice-Chair Ortiz OBJECTED for discussion.                                                                                       
Co-Chair  Johnston  explained  that  with  current  economic                                                                    
uncertainties,  she  did  not think  the  bill  should  take                                                                    
effect  in the  current  year. She  also thought  carve-outs                                                                    
should be avoided, as it  was unclear which industries would                                                                    
be affected most.                                                                                                               
12:32:17 PM                                                                                                                   
AT EASE                                                                                                                         
12:32:41 PM                                                                                                                   
Co-Chair Johnston WITHDREW her motion.                                                                                          
Co-Chair Johnston restated her motion.  She MOVED to ADOPT a                                                                    
conceptual amendment  that would  include an  effective date                                                                    
of January 1, 2021 and  to direct Legislative Legal Services                                                                    
to make any technical or conforming changes.                                                                                    
Representative Tilton OBJECTED.                                                                                                 
Representative Tilton wanted  clarification that without the                                                                    
amendment to change  the effective date to  January 1, 2021,                                                                    
the  bill  would take  effect  90  days after  the  governor                                                                    
signed the bill if  he chose to do so. She  asked if she was                                                                    
accurate. Co-Chair Johnston replied, "Thants correct."                                                                          
Representative Tilton WITHDREW her OBJECTION.                                                                                   
Vice-Chair Ortiz OBJECTED for further discussion.                                                                               
Vice-Chair  Ortiz asked  that if  the amendment  were to  be                                                                    
adopted,  he wondered  how much  revenue would  be lost.  He                                                                    
invited members  to keep in mind  the states  infrastructure                                                                    
and deferred maintenance costs.                                                                                                 
Mr.  Peterson  responded  that the  effective  date  on  the                                                                    
Senate  side was  July  1,  2020 but  failed  on the  Senate                                                                    
floor.  Currently, the  bill would  go into  effect 90  days                                                                    
after the governor  signed the bill or allowed  it to become                                                                    
law without  signature. It  was difficult  to know  when the                                                                    
bill  would go  into  effect, as  it was  up  to the  Senate                                                                    
President,  once the  bill  passed in  the  Senate, when  it                                                                    
would  be  transmitted to  the  governor.  If the  bill  was                                                                    
transferred  to the  governor while  the legislature  was in                                                                    
session, he would have 15  days, excluding Sundays to decide                                                                    
what to  do with the  bill. Should  the governor sign  it or                                                                    
allow it  to become  law without signature,  it would  be 90                                                                    
days after that.  The effective date of the  bill without an                                                                    
effective date would  be sometime in the  summer rather than                                                                    
July 1,  2020. He anticipated  that about $16  million would                                                                    
be lost with a delayed effective date of January 1, 2021.                                                                       
Vice-Chair  Ortiz asked  if Mr.  Peterson  thought the  bill                                                                    
sponsor would  be open to  the amendment.  Co-Chair Johnston                                                                    
interjected  that  she  had spoken  with  the  bill  sponsor                                                                    
earlier in  the day and  he was  open to the  amendment. Mr.                                                                    
Peterson responded, "That's correct."                                                                                           
Representative  Knopp  asked  that  if the  bill  went  into                                                                    
effect  July  1,  2020  there would  be  more  revenue  lost                                                                    
because of activity in the  summer. He believed Mr. Peterson                                                                    
was  assuming that  revenues would  be equal  throughout the                                                                    
year.  He suspected  that the  summer months  would generate                                                                    
more revenue than  in the winter months. He asked  if it was                                                                    
reasonable to think the state  would be losing more than $16                                                                    
million in revenue by deferring the effective date.                                                                             
Mr. Peterson  responded that it  was certainly  possible. He                                                                    
assumed  more  revenue  would be  generated  in  the  summer                                                                    
months  with   the  increase  in  tourism   and  rental  car                                                                    
business. He was  providing a rough estimate  of $16 million                                                                    
to  $17  million by  taking  half  of  what the  bill  would                                                                    
generate in a year.                                                                                                             
12:37:32 PM                                                                                                                   
Representative Wool  thought any guess about  fuel purchases                                                                    
in the following  months would be just a  guess. He wondered                                                                    
about the  railroad. He commented  that the  Alaska Railroad                                                                    
bought a significant amount of  diesel. Mr. Peterson guessed                                                                    
that the  railroad would  be exempt  as a  government entity                                                                    
similar to the ferry system.                                                                                                    
Representative  Carpenter  was  uncertain of  revenue  loss.                                                                    
However, it  was also additional  cash being taken  from the                                                                    
economy. Cash  was the  most important  thing to  get people                                                                    
through the current situation.                                                                                                  
Vice-Chair Ortiz WITHDREW his OBJECTION.                                                                                        
There being  NO further  OBJECTION, it  was so  ordered. The                                                                    
conceptual amendment was ADOPTED.                                                                                               
12:40:07 PM                                                                                                                   
AT EASE                                                                                                                         
12:41:35 PM                                                                                                                   
CS FOR SPONSOR SUBSTITUTE FOR SENATE BILL NO. 155(RES)                                                                        
     "An  Act relating  to  exploration  and mining  rights;                                                                    
     relating to  annual labor requirements with  respect to                                                                    
     mining   claims  and   related   leases;  relating   to                                                                    
     statements  of  annual  labor;  defining  'labor';  and                                                                    
     providing for an effective date."                                                                                          
12:41:35 PM                                                                                                                   
CHAD HUTCHINSON, STAFF,  SENATE MAJORITY, introduced himself                                                                    
and indicated SB 155 was a  mining rights bill. The bill was                                                                    
the product  of a  multi-year process  in which  the sponsor                                                                    
had  been working  with a  number of  stakeholders including                                                                    
the  Alaska Miners  Association Working  Group. The  working                                                                    
group  was  composed  of   several  members  including  J.P.                                                                    
Tangeman,  Ramona Monroe,  Deanna  Crockett, Karl  Hanneman,                                                                    
and a  number of small  placer miners from  Interior Alaska.                                                                    
The Department  of Natural Resources (DNR)  had been helpful                                                                    
in  crafting the  legislation.  He noted  that  a couple  of                                                                    
members of  the Senate had  taken a special interest  in the                                                                    
bill over  the years.  He reported that  the genesis  of the                                                                    
bill started during the Walker administration.                                                                                  
Mr.   Hutchinson   began    the   PowerPoint   Presentation:                                                                    
"Committee  Substitute  for  Sponsor Substitute  for  Senate                                                                    
Bill  155  (CSSSSB155(RES))  (copy on  file).  He  addressed                                                                    
slide  2  which  discussed  the purpose  of  the  bill.  The                                                                    
legislation  was an  attempt to  correct perceived  problems                                                                    
that  had occurred  throughout the  mining  industry over  a                                                                    
couple  of  decades.  The bill  addressed  due  process  and                                                                    
proper notice.                                                                                                                  
Mr.  Hutchinson  reported  that   Senator  bishop  had  been                                                                    
approached  by  small miners  from  the  Interior and  small                                                                    
miners, in general, about  paperwork violations causing them                                                                    
to  have problems  related to  their  mineral interests.  In                                                                    
some  cases,  miners experienced  a  de  facto taking  their                                                                    
mineral  interests because  of  a typo  in  an Affidavit  of                                                                    
Annual Labor  or other required paperwork.  Essentially, the                                                                    
bill  was  about mining  rights.  He  thought the  bill  was                                                                    
timely because it would help  to ensure that Alaskas  mining                                                                    
laws  would be  adequately equipped  for the  future of  the                                                                    
nation  and  Alaska. As  the  state  was  looking at  a  new                                                                    
economy  it  would  be considering  electric  vehicles,  the                                                                    
internet, a  planned integrated electrical grid  system, and                                                                    
smart  homes,   for  example.  The  reality   was  that  raw                                                                    
materials were  needed for all  of the things  he mentioned.                                                                    
Alaska was  a resource-rich state.  He cited several  of the                                                                    
states   resources. He  remarked that  the bill  synced well                                                                    
with  some  of  the  goals at  the  federal  level.  Senator                                                                    
Murkowski was  moving forward with  the American  Energy and                                                                    
Innovation Act.  The importance of mineral  security was one                                                                    
of the principles being considered  in the act, as there was                                                                    
an  increased   focus  on  decreasing  the   United  States                                                                     
reliance on  China. China produced  a significant  amount of                                                                    
rare  earth   elements  including  critical   and  strategic                                                                    
minerals related  to national defense. There  was a national                                                                    
appetite for the state to move in a different direction.                                                                        
Mr.  Hutchinson indicated  that the  foundation of  the bill                                                                    
started with  the Alaska Constitution.  He cited  Article 8,                                                                    
Section  1   that  talked  about   the  general   policy  of                                                                    
developing  resources available  for maximum  use and  being                                                                    
consistent with  the publics   interest. Article  8, Section                                                                    
11 of the constitution  dealt with mineral rights recognized                                                                    
at statehood.  The rights continued  based on  statements or                                                                    
affidavits of  annual labor. He  explained that a  miner was                                                                    
required to  provide a document  that stated that  they were                                                                    
producing on the land and to  pay royalties and rents on the                                                                    
land. He indicated there would  be further discussion on how                                                                    
the  state  was  ensuring  that  miners  were  in  the  best                                                                    
position to do  what they did best - produce.  The state was                                                                    
trying to  give the benefit  of the  doubt to miners,  as it                                                                    
was  in the  interest of  the state,  small businesses,  and                                                                    
large businesses. The  bill was also designed  for miners in                                                                    
the field  and based on  real world experience. Much  of the                                                                    
bill  was directly  based on  an injustice  that had  likely                                                                    
occurred  previously  and had  been  relayed  to the  Alaska                                                                    
Miners Association.                                                                                                             
Mr. Hutchinson moved  to slide 3 which  provided an example.                                                                    
He explained that a small miner  in the Interior had a small                                                                    
typo  on one  of his  filings  related to  his Statement  of                                                                    
Annual Labor.  Even though the statement  was filed properly                                                                    
with the  recorder's office and  the notary  stamp contained                                                                    
the correct  date, he  was accused  of abandoning  the claim                                                                    
because he failed  to put the date on his  statement. It was                                                                    
a large  problem for miners  because they had  invested time                                                                    
and money but did not have  a guarantee that they would have                                                                    
a right  to their  claim in the  future. The  bill addressed                                                                    
the problem.                                                                                                                    
12:48:27 PM                                                                                                                   
Mr.  Hutchinson   continued  to  slide  4   which  addressed                                                                    
qualifications in sections 1, 2,  and 3. The bill was broken                                                                    
into  large   sections.  Sections  1,  2   and  3  addressed                                                                    
qualifications.  Currently,  a  person  had  to  be  a  U.S.                                                                    
citizen and  18 years old.  A U.S. Corporation  qualified as                                                                    
an interest.  Guardians of minors  also qualified.  The bill                                                                    
would add a  few provisions that occurred in  real life that                                                                    
the working  group recommended  for 2020.  He read  the list                                                                    
from the slide:                                                                                                                 
     Section   1       AS    38.05.190(a)   is   amended   -                                                                    
     Adds that mining rights can be acquired by:                                                                                
         Conservators of minors or incapacitated adults;                                                                     
         Individuals at least 18 years of age or older who                                                                   
          have declared their intentions to become citizens                                                                     
          of the United States;                                                                                                 
         Limited Liability Companies (LLCs);                                                                                 
         Registered trusts (with a qualified trustee)                                                                        
Mr. Hutchinson noted that the  word "persons" was changed to                                                                    
"individuals"  in  the  bill.   Also,  the  language  as  it                                                                    
pertained  to declaring  intentions to  become a  citizen of                                                                    
the United  States went  back to the  federal mining  law of                                                                    
Mr. Hutchinson turned  to slide 5 which  addressed Section 2                                                                    
of the  bill. The  section had  to do  with due  process and                                                                    
proper  notice.  Senator Bishop  wanted  to  make sure  that                                                                    
miners were  given the ability that  if there was a  typo or                                                                    
some  sort of  error,  they would  be  given proper  notice,                                                                    
given time  to cure the  issue, and allowed to  move forward                                                                    
with production.  If an unqualified person  received notice,                                                                    
they  might  become  qualified or  transfer  their  interest                                                                    
within  90 days  after due  process and  written notice  and                                                                    
before the department made a "void" declaration.                                                                                
Mr. Hutchinson  moved to slide  6 which addressed  Section 3                                                                    
dealing  with   qualifications  specific  to   process.  The                                                                    
written notice  was very important to  Senator Bishop. There                                                                    
were  two levels  of notice  that existed  in the  bill. The                                                                    
first was written notice via  certified mail. The second was                                                                    
a notice via regular mail.  He explained that many miners in                                                                    
the field were away from  civilization. If a miner failed to                                                                    
rectify the issue, the result would be void.                                                                                    
12:53:29 PM                                                                                                                   
Mr. Hutchinson  discussed additional  measures of  Section 3                                                                    
on slide 7:                                                                                                                     
    (f)  If the unqualified person fails to cure the                                                                         
     defect  within  90  days   after  the  department  sent                                                                    
     written   notice,  the   department  may   declare  the                                                                    
     exploration  or  mining  interest "void"  and  open  to                                                                    
     location.  There shall  be no  third-party location  or                                                                    
     judicial action within those 90 days.                                                                                      
    (g)  "qualified to do business in this state" means                                                                      
     holding a certificate issued by the Commissioner of                                                                        
     Commerce,    Community,   and    Economic   Development                                                                    
     (necessary to do business in the state).                                                                                   
Mr. Hutchinson indicated Section 4  and Section 5 dealt with                                                                    
mining claims on  slide 8. He explained  that deposit rights                                                                    
were established  in the State  of Alaska by using  a system                                                                    
called  the Meridian  Township,  Range,  Section, and  Claim                                                                    
(MTRSC) System. It  was suggested that a  valid MTRSC system                                                                    
location  presumptively   established  the  rights   of  the                                                                    
deposits in the section that a miner filled out.                                                                                
Mr.  Hutchinson  displayed  slide  9  which  showed  a  form                                                                    
completed  by   miners.  He   reviewed  the   form  contents                                                                    
including  the area  for a  claims sketch.  The example  was                                                                    
done on  a computer.  However, he had  seen forms  with hand                                                                    
drawn maps with xs denoting location.                                                                                           
Mr. Hutchinson moved  to Section 5 of the bill  on slide 10.                                                                    
Section 5 dealt with mining  claims and changes in locations                                                                    
and amended  notices. The  bill eliminated  some unnecessary                                                                    
language that,  because of changes  made later in  the bill,                                                                    
was   no  longer   relevant.  There   was  a   reference  to                                                                    
AS 38.05.200 which  indicated that notices could  be amended                                                                    
at any time  to correspond to amended locations,  as long as                                                                    
it did not  interfere with the rights of  others. It allowed                                                                    
the miner to  amend and correct, providing  more freedom and                                                                    
flexibility  as long  as the  document was  recorded in  the                                                                    
same manner as the original form.                                                                                               
Mr. Hutchinson returned  to the theme of  making sure miners                                                                    
were  producing and  that  every benefit  of  the doubt  was                                                                    
given to them to ensure  that they would bring raw materials                                                                    
to market.                                                                                                                      
Mr.  Hutchinson  advanced  to   slide  11  which  showed  an                                                                    
Affidavit of  Annual Labor. He  indicated sections 6,  7, 8,                                                                    
and 9 dealt  with annual labor. Annual labor was  one of the                                                                    
things under the  state constitution the miner had  to do to                                                                    
show that he  was producing on the land. The  sheet shown on                                                                    
the slide was  an example of a form miners  had to complete.                                                                    
The form showed  who, what, when, and why  details. The form                                                                    
demonstrated that  the ground was being  worked. He reviewed                                                                    
each section of the form.  The most important section was at                                                                    
the  bottom  of  the  form where  a  labor  description  was                                                                    
provided.  It   explained  the  activities  of   the  miners                                                                    
including moving  dirt, building roads, or  exploration. The                                                                    
form had to be completed every year and submitted to DNR.                                                                       
12:57:35 PM                                                                                                                   
Mr.  Hutchinson explained  that  Section 6  of  the bill  on                                                                    
slide 12 outlined  the guidelines  of performance  of annual                                                                    
labor. The bill included a  few new provisions that mirrored                                                                    
more  of  what happened  in  reality.  Sometimes there  were                                                                    
mineral interests,  boundaries of federal or  private Native                                                                    
regional corporation  land or state  land. The  bill sponsor                                                                    
wanted to make  it clear that one Statement  of Annual Labor                                                                    
and  the  performance  occurring  on  the  land  could  also                                                                    
include the  adjacent federal and private  mineral interests                                                                    
that might be in close vicinity.                                                                                                
Mr. Hutchinson noted  that in the labor  portion he included                                                                    
what  it looked  like as  it  related to  the amount  miners                                                                    
might have  to pay  if they  did not  work the  grounds. The                                                                    
rates  included  $100  for  each claim  and  $400  for  each                                                                    
quarter section.  If miners were  not producing,  they could                                                                    
choose  to  pay  a  monetary  fee.  One  of  the  provisions                                                                    
included in the bill was that  a miner could not pay in lieu                                                                    
of producing or conducting labor  on the ground for not more                                                                    
than five consecutive  years. The state did  not want miners                                                                    
sitting on grounds paying nominal  amounts and not producing                                                                    
raw materials.                                                                                                                  
Co-Chair Foster asked  that if a miner with 10  claims or 10                                                                    
quarter sections which were all  adjacent to each other (all                                                                    
touching) would  only have to complete  one affidavit rather                                                                    
than  one for  each.  He  queried the  fee  and asked  about                                                                    
claims  nearby. Mr.  Hutchinson  responded that  as long  as                                                                    
there was a  common plan for development in  the areas, only                                                                    
one  Statement  of  Annual  Labor  would  be  required.  The                                                                    
purpose of the  bill was to reduce paperwork  for miners and                                                                    
to make sure they were producing.                                                                                               
Co-Chair Foster  asked if they  would qualify if  the claims                                                                    
were 1  mile away  rather than adjacent  to each  other. Mr.                                                                    
Hutchinson  presumed they  would  be  touching. However,  he                                                                    
indicated there was someone online to answer the question.                                                                      
Co-Chair  Foster was  comfortable with  the answer.  He also                                                                    
asked for clarification about the ability  to pay a fee if a                                                                    
miner did not  work the land. Mr.  Hutchinson responded that                                                                    
a miner  could currently pay  a fee. The bill  would provide                                                                    
particulars to the  labor itself. The bill  would also allow                                                                    
a miner to  pay without producing. However, a  cap was being                                                                    
inserted  which   would  not   allow  payment   beyond  five                                                                    
consecutive years.                                                                                                              
Co-Chair Foster thought that as  long as a miner worked once                                                                    
every five  years, they would  be able to make  payments for                                                                    
five  years. He  provided an  example  and asked  if he  was                                                                    
correct. Mr.  Hutchinson deferred to Brent  Goodrum from DNR                                                                    
who was online.                                                                                                                 
1:01:48 PM                                                                                                                    
BRENT  GOODRUM, DEPUTY  COMMISSIONER, DEPARTMENT  OF NATURAL                                                                    
RESOURCES (via  teleconference), reported that  currently in                                                                    
state regulations miners were able  to pay in lieu of labor.                                                                    
The bill  sought to define the  limit in statute to  no more                                                                    
than five consecutive years.                                                                                                    
Representative  Josephson  assumed  that the  point  of  the                                                                    
five-year cap was to put a  claim in service and produce it,                                                                    
rather than  for someone to  only talk about it  for several                                                                    
years. Mr. Hutchinson responded in the affirmative.                                                                             
Representative   Josephson   referenced  Co-Chair   Fosters                                                                     
example of 10  adjacent claims. He wondered  whether all ten                                                                    
claims would  be satisfied if  the claim holder  only worked                                                                    
one of  them. Mr.  Hutchinson deferred  to Mr.  Goodrum. Mr.                                                                    
Goodrum responded that  if they were to  work one particular                                                                    
claim and held  the other claims in common the  labor on the                                                                    
one claim would satisfy the other claims.                                                                                       
Representative  Josephson asked  if  the  new provision  was                                                                    
more generous  than in  current law where  there was  a more                                                                    
overreaching expansive  effort. He  asked if  he had  made a                                                                    
fair  assessment.  Mr.  Goodrum  replied  that  it  was  the                                                                    
current  practice  as well  with  any  affidavits of  labor.                                                                    
Labor that was conducted on  claims that were held in common                                                                    
could be attributed  to all of the claims  and covered them.                                                                    
It was consistent with how DNR was currently doing things.                                                                      
Representative Josephson  asked that  if he  had a  claim on                                                                    
state  land which  was  adjacent to  federal  land, a  miner                                                                    
would  have to  have a  joint plan  of development  with the                                                                    
federal  claim owner.  He wondered  if he  was correct.  Mr.                                                                    
Goodrum   responded   that  Representative   Josephson   was                                                                    
correct.  Currently,  in  a   situation  where  an  adjacent                                                                    
mineral interest was  federal or private, it  was a slightly                                                                    
different nuance being captured in the bill.                                                                                    
1:06:00 PM                                                                                                                    
Representative  Josephson   asked  Mr.  Hutchinson   if  the                                                                    
removal  of   the  word  "affidavit"  would   influence  the                                                                    
document being a sworn statement.                                                                                               
Mr. Hutchinson  responded that  it would  not have  the same                                                                    
legal effect as an affidavit.  The reason for the removal of                                                                    
the  word  and replacing  it  with  "Statement" was  because                                                                    
there  had  been  errors  on the  affidavits  in  the  past.                                                                    
However, it proved to be  factually inaccurate. He suggested                                                                    
that  it was  a  real-world issue,  particularly with  small                                                                    
family  mines. The  sponsor thought  it would  be better  to                                                                    
declare  it  a Statement  of  Annual  Labor rather  than  an                                                                    
affidavit that  would be filed  with the court. It  would be                                                                    
slightly different. The obligation  and the expectation were                                                                    
for a person  to tell the truth. Technically, it  would be a                                                                    
statement rather than an affidavit.                                                                                             
Co-Chair  Foster asked  about  miners submitting  affidavits                                                                    
for claims that were scattered  and inaccessible by road. He                                                                    
asked if there  was any enforcement in terms  of making sure                                                                    
miners actually did the labor that they reported.                                                                               
Mr.  Goodrum  responded  that currently  the  affidavits  of                                                                    
annual labor were  prima facie evidence that  the labor had,                                                                    
in fact, taken affect. As  the legislature went forward with                                                                    
the legislation designed  to help clarify and  prove some of                                                                    
the deficiencies  that were currently in  statute, DNR would                                                                    
also have  to look  at what  regulations would  help clarify                                                                    
how  DNR would  work with  the statutes.  He suggested  that                                                                    
some of the  work could be done. For instance,  a miner in a                                                                    
geographic  area  flying  lidar  or  performing  some  other                                                                    
activity that  might encompass all of  the claim properties,                                                                    
would likely  be contributing  to the  labor necessary  to a                                                                    
particular claim.  He suggested  that additional  work would                                                                    
be required of DNR moving forward with the legislation.                                                                         
Representative  Wool   asked  to  return  to   slide  9.  He                                                                    
referenced  the squares  [Representative Wool  was referring                                                                    
to  the squares  in  the  claim sketch].  He  asked if  each                                                                    
square  with   a  number  was   an  individual   claim.  Mr.                                                                    
Hutchinson believed the answer was yes.                                                                                         
Representative Wool suggested  that for any work  of $100 on                                                                    
one of the 10 claims that  were touching would count for all                                                                    
10  claims.  He  asked  if  the  reason  for  including  the                                                                    
requirement  of labor  was  to ensure  that  the person  was                                                                    
actually working the claim. He  thought it was more valuable                                                                    
to  the state  for someone  to  work the  claim rather  than                                                                    
paying $100  to the  state. Mr.  Hutchinson stated  that the                                                                    
representative  was correct.  He explained  that the  reason                                                                    
the bill  included a 5-year  threshold was to  avoid someone                                                                    
simply  sitting  on  the resource  rather  than  mining  the                                                                    
interest. The bill was attempting to remedy the problem.                                                                        
Representative Wool  asked how long  the fee had  been $100.                                                                    
Mr. Hutchinson  would have  to look  up the  information. To                                                                    
his knowledge the amount had  not changed significantly over                                                                    
the course of the mining industry.                                                                                              
Representative  Wool suggested  that the  fee of  $100 could                                                                    
have been  in effect in  1970. Mr. Hutchinson  indicated the                                                                    
amount had been around for a  while. He would have to double                                                                    
check the specific date.                                                                                                        
1:12:15 PM                                                                                                                    
Mr.  Hutchinson continued  to Section  7 on  slide 13  which                                                                    
dealt with the information found  on the Statement of Annual                                                                    
Labor.  The bill  would  make things  crystal  clear to  the                                                                    
miners what the expectations were  of the state. He read the                                                                    
list from the slide:                                                                                                            
     Section 7 - AS 38.05.210(b) Clarifies the information                                                                      
     found in a Statement of Annual Labor                                                                                       
           Individual signs the statement to certify that                                                                    
             it is true and correct to the best of the                                                                          
             individual's knowledge.                                                                                            
           The statement must include:                                                                                       
                The assessment work year                                                                                     
                The name and land administration number                                                                      
                assigned by the department                                                                                      
                Every meridian, township, range, and                                                                         
                  section in which the mining claim is                                                                          
                The recording district                                                                                       
                The total amount of work required                                                                            
                A description of the labor performed                                                                         
                The  value   of   the   labor   performed                                                                    
                  (including   excess   labor   value   from                                                                    
                  previous year)                                                                                                
                The name and mailing address of the owner                                                                    
                  designated to receive notices                                                                                 
Mr. Hutchinson moved  to slide 14 dealing  with annual labor                                                                    
and paper  requirements as  stipulated in  Section 8  of the                                                                    
bill. He  restated that the  benefit of the doubt  was being                                                                    
given to  the miner. The  bill encouraged miners  to produce                                                                    
and  take minerals  from  the ground.  The  bill would  also                                                                    
remove some of the restrictions  having to do with paperwork                                                                    
violations. The  provision in Section  8 would  allow miners                                                                    
to  correct their  Statement  of Annual  Labor  at any  time                                                                    
before DNR declared  that the interest was  invalid. He read                                                                    
from the slide:                                                                                                                 
   Section 8 AS 38.05.210(c) -Allows for statements of                                                                          
   annual labor to be corrected at any time (before                                                                             
   "invalid" declaration)                                                                                                       
         The Statement of Annual Labor, whether recorded                                                                     
          before or after the effective date of this Act,                                                                       
          may be corrected or amended before the 90-day                                                                         
          cure period.                                                                                                          
         The corrected Statement of Annual Labor shall be                                                                    
          recorded like the original.                                                                                           
         A corrected statement may not be applied against                                                                    
          labor required to be done during a subsequent                                                                         
         A corrected statement shall be recorded in 90                                                                       
         2-year threshold has been removed. In other                                                                         
          words: There had to be a correction within two-                                                                       
Mr. Hutchinson  elaborated that one  of the things  that had                                                                    
been a  problem for some  of the mineral interests  was that                                                                    
there could  not have  been a correction  of a  Statement of                                                                    
Annual  Labor that  went beyond  a 2-year  period. The  bill                                                                    
would open the limited window to anytime.                                                                                       
Mr. Hutchinson  moved to section  9 on slide 15  which added                                                                    
new provisions.  The provisions had  to do with some  of the                                                                    
technicalities  related to  statements of  annual labor.  He                                                                    
restated many  of the  provisions including  certified mail,                                                                    
proper notice, and a 90-day threshold.                                                                                          
Mr. Hutchinson  continued to slide  16. The  information was                                                                    
added in statute (AS 38.05.215  - AS. 38.05.235) and applied                                                                    
to an  instance where  there were two  co-owners and  one of                                                                    
them  had to  forfeit their  interest. The  process involved                                                                    
publication, going  through the proper process  of recording                                                                    
in the recording  district. He as happy  to answer questions                                                                    
regarding the specific topic at a later time.                                                                                   
Mr. Hutchinson  continued to Section 10  which defined labor                                                                    
on slide  17 and  slide 18.  He read  the list  beginning on                                                                    
slide 17 and continuing on slide 18:                                                                                            
Section 10 Labor includes:                                                                                                      
    Work performed in good faith on a mining claim,                                                                          
     leasehold location, or mining lease that is directly                                                                       
     related to exploring for, developing, or producing                                                                         
     minerals, including:                                                                                                       
         Excavating, tunneling, drilling, or clearing land                                                                   
         Constructing or maintaining roads, trails, and                                                                      
          landing strips                                                                                                        
         Extracting or producing ore                                                                                         
    Performing metallurgical    analyses,   environmental                                                                    
     studies, economic feasibility studies, engineering,                                                                        
     and permitting                                                                                                             
    Constructing settling ponds, water supplies, and other                                                                   
    Providing worker housing                                                                                                 
    Performing reclamation activities under a reclamation                                                                    
    Transporting workers and equipment in the state to or                                                                    
     from a mining site (not to exceed 50% of the total                                                                         
     value of labor in the Statement of Annual Labor for                                                                        
     the assessment year)                                                                                                       
    Conducting a geological or airborne survey by a                                                                          
     qualified expert and verified by a detailed report                                                                         
     that sets out:                                                                                                             
         The location of the survey                                                                                          
       The nature, extent, and cost of the survey                                                                            
         The name, address, and professional background of                                                                   
          the person conducting the work                                                                                        
Mr. Hutchinson noted that a  qualified expert was previously                                                                    
defined in AS 38.05.242(6).                                                                                                     
Mr.  Hutchinson  continued to  slide  19,  Section 11  which                                                                    
dealt with  the abandonment of  a claim.  It tied in  with a                                                                    
previous example of a typo  scenario. He elaborated that the                                                                    
issue  of abandonment  of a  claim would  arise if  no labor                                                                    
occurred,  no rent  was  paid, or  no  royalties were  paid.                                                                    
Under  such  circumstances  another  miner  could  work  the                                                                    
Mr. Hutchinson  explained that the heart  of the legislation                                                                    
was removing  the provision  that if  a Statement  of Annual                                                                    
Labor did  not accurately set  out essential facts  it would                                                                    
become void  and would have  no effect. Essentially,  a typo                                                                    
on a  Statement of Annual Labor  would no longer be  a back-                                                                    
breaker as  it related to  a miners  ability to  continue to                                                                    
work  the ground.  It alleviated  the  abandonment issue  in                                                                    
which a miner had invested  a significant amount of time and                                                                    
equipment  and resources  just because  of a  typo in  their                                                                    
Statement of Annual Labor.                                                                                                      
Mr.  Hutchinson  turned  to  slide  20  which  continued  to                                                                    
address Section  11 of  the legislation.  It was  a clean-up                                                                    
provision related to rents and  royalties and specified that                                                                    
if there had been a  partial payment of rents and royalties,                                                                    
the  miner would  have  the ability  to  cure the  situation                                                                    
paying the full payment amount due to the State of Alaska.                                                                      
Mr. Hutchinson moved  to slide 21 dealing  with transfers in                                                                    
Section 12 of the bill.  The section dealt with transferring                                                                    
a claim  from an unqualified  person to a  qualified person.                                                                    
The section  outlined the procedure.  One of  the provisions                                                                    
that had  been eliminated  was a nebulous  provision related                                                                    
to regulations deemed to be too vague.                                                                                          
Mr.  Hutchinson moved  to slide  22, Section  13 that  dealt                                                                    
with another  clean-up provision. It ensured  that mining on                                                                    
state  selected   land  located   on  or  after   an  active                                                                    
unpatented federal  mining claim could be  located only with                                                                    
recorded permission  of the unpatented federal  mining claim                                                                    
Mr.  Hutchinson  scrolled  to  slide  23  which  related  to                                                                    
Section 14  of the bill.  The provision stated that  DNR was                                                                    
not required  to go  back and look  through their  files for                                                                    
compliance  issues  without  any  sort  of  good  cause.  He                                                                    
reported that  DNR naturally went  through the  process when                                                                    
some of the  filings were presented to  the department. Some                                                                    
of  the small  miners' groups  were concerned  that DNR  was                                                                    
unilaterally  looking  through  the   files  for  typos  and                                                                    
violations. The bill ensured that it was not the case.                                                                          
1:18:11 PM                                                                                                                    
Mr. Hutchinson reviewed slide 24  regarding sections 15, 16,                                                                    
and  17 of  the bill.  Section 15  dealt with  applicability                                                                    
which mostly applied to Section  8 and Section 9 and Section                                                                    
13  - the  written  permission from  the federal  unpatented                                                                    
holder.  Section   16  ensured  that  there   was  a  smooth                                                                    
transition process.  As the  state went  through regulations                                                                    
there would  not be any  declarations of  abandonment moving                                                                    
forward if  the legislation were  to become law.  Section 17                                                                    
indicated  an immediate  effective  date.  He concluded  his                                                                    
presentation and was available for questions.                                                                                   
Representative Wool had a question  about labor and the $100                                                                    
fee. He suggested paying $100  was much easier than actually                                                                    
doing work. He asked what  would happen presently if a miner                                                                    
did not meet  the labor requirement. He also  asked how long                                                                    
a miner  could not  do labor.  Mr. Hutchinson  answered that                                                                    
$100  was in  statute currently.  The bill  would limit  the                                                                    
time a  person could  sit on  a claim  without working  to 5                                                                    
Representative  Wool wondered  how  it  appeared in  statute                                                                    
presently.  He asked  if the  timeframe was  indefinite. Mr.                                                                    
Hutchinson answered that it was  the reason for implementing                                                                    
a restriction.                                                                                                                  
Representative  Wool  suggested  that  people  holding  onto                                                                    
claims and not developing  them were more likely mom-and-pop                                                                    
operations.   Mr.  Hutchinson   had  mentioned   molybdenum,                                                                    
magnesium, and  graphite, which he thought  would be pursued                                                                    
by  corporate entities  rather than  the  smaller miner.  He                                                                    
wondered  if there  was a  disconnect mostly  for gold.  Mr.                                                                    
Hutchinson commented  that it was  for the future.  He noted                                                                    
that the Alaska Miners  Association included large and small                                                                    
miners. Generally,  there had been  a consensus  in support.                                                                    
If there was  time, the committee would  hear testimony from                                                                    
some of the  larger mines that had capital  interests off to                                                                    
the sideline  but were  supportive of  the bill.  It started                                                                    
with the mom-and-pop operations and the smaller miners too.                                                                     
1:22:01 PM                                                                                                                    
Representative  Wool  asked  if   there  were  small  mining                                                                    
operations  that  also  looked for  other  minerals  besides                                                                    
gold.  Mr. Hutchinson  indicated that  it started  with gold                                                                    
which was an important mineral.                                                                                                 
Representative  LeBon shared  that he  had provided  banking                                                                    
services for  many gold miners  during his past career  as a                                                                    
banker. He agreed that it was  long overdue to clean up some                                                                    
of  the  statutes  and regulations  related  to  mining.  He                                                                    
attested  that the  concerns and  issues brought  up by  Mr.                                                                    
Hutchinson  were  very real,  as  he  had heard  about  them                                                                    
often. The  relationships that miners  had with DNR  was not                                                                    
always good.  He suggested that  the bill would  likely help                                                                    
improve those  relationships. The bill would  lend itself to                                                                    
increased mining  productivity and encourage entry  into the                                                                    
industry for  individuals who wanted  to start a  gold mine.                                                                    
He thought it  would be easier for potential  miners to take                                                                    
the initial  step in investing  in a gold  mining operation.                                                                    
He  argued that  the legislation  was not  only advantageous                                                                    
for  current miners,  it would  also  benefit future  miners                                                                    
encouraged by the  changes presented in the bill.  He was in                                                                    
full support of the bill.                                                                                                       
Vice-Chair  Ortiz  appreciated  the  legislation.  He  asked                                                                    
about  the regulatory  environment  in  relationship to  the                                                                    
mining industry  prior to  the bill.  He wondered  if Alaska                                                                    
was viewed as  a friendly and supportive  environment to the                                                                    
mining industry  prior to the bill.  Mr. Hutchinson answered                                                                    
that he had  heard Senator Bishop state  numerous times that                                                                    
he believed Alaska's law was 50 years behind.                                                                                   
Vice-Chair Ortiz  asked if  Mr. Hutchinsons   response meant                                                                    
that  Alaska  was less  open  to  the mining  industry.  Mr.                                                                    
Hutchinson  answered  there had  been  a  struggle with  the                                                                    
perception  of   how  DNR  was  interpreting   some  of  the                                                                    
provisions  in statute.  He brought  up the  example he  had                                                                    
previously  provided  about  de facto  abandonment  where  a                                                                    
miner  received  a  document  stating  that  his  claim  was                                                                    
abandoned. He was  not provided with an ability  to cure the                                                                    
issue.  Generally, constitutionally,  a person  was entitled                                                                    
to  due process  and notice.  He thought  a legitimate  case                                                                    
could be made that there  had been de facto takings that had                                                                    
occurred over decades where the  affected miner did not have                                                                    
the ability to  cure in a way  that satisfied constitutional                                                                    
requirements of due process and proper notice.                                                                                  
Vice-Chair  Ortiz asked  what  the  most significant  impact                                                                    
would be of enacting the  bill. Mr. Hutchinson answered that                                                                    
the  hope   was  increased   production.  He   believed  the                                                                    
legislation would  provide more  stability with  the states                                                                     
statutes.  He  suggested  that the  due  process  provisions                                                                    
created a  higher probability that  people could  invest the                                                                    
necessary capital knowing  that the law was  structured in a                                                                    
way that placed miners in a good position to be successful.                                                                     
Co-Chair Foster shared  that he had grown up  mining and his                                                                    
family  had  been  in  the mining  industry.  He  asked  for                                                                    
verification that  the bill did not  affect the carryforward                                                                    
for the  affidavits. For  example, if a  miner did  $1000 in                                                                    
labor in the current year, he  would be able to carry over a                                                                    
portion to the  following year. He did not  believe the bill                                                                    
changed  the provision.  He  asked if  he  was correct.  Mr.                                                                    
Hutchinson responded, "Thats correct."                                                                                          
Co-Chair Foster suggested  that if a miner  was deficient in                                                                    
their  rent payment  made on  the affidavit  of labor,  they                                                                    
would receive  a notice  indicating that there  had to  be a                                                                    
cure. However, if  a miner were to send in  the affidavit of                                                                    
labor  past  the  due  date,   it  would  be  considered  an                                                                    
abandonment of a claim and  there would be no further notice                                                                    
provided to the miner. He asked if he was accurate.                                                                             
Mr. Hutchinson  answered there was a  balance. He elaborated                                                                    
that the bill provided a miner  the ability to cure within a                                                                    
timeframe. Ultimately, the idea  was to increase production.                                                                    
If  a miner  received notice  that  there was  some sort  of                                                                    
deficiency, was given  the opportunity to cure,  and did not                                                                    
act,  someone else  in  line  could step  in.  The bill  was                                                                    
encouraging someone to produce the  claim. The bill struck a                                                                    
Co-Chair Foster suggested that it  was not only addressing a                                                                    
deficiency in a  rent payment, it also provided  a miner the                                                                    
opportunity to cure  a situation in which  the affidavit was                                                                    
not  submitted  in a  timely  manner.  He  asked if  he  was                                                                    
correct.  Mr.  Hutchinson answered  that  once  a miner  had                                                                    
proper notice, they  would have 90 days to  cure the defect.                                                                    
     If  they   were  not  able  to,   it  could  constitute                                                                    
1:28:59 PM                                                                                                                    
Representative Josephson  stated that currently  the process                                                                    
was  indefinite.   A  person  could  receive   a  claim  and                                                                    
effectively turn it into their  cabin site without any other                                                                    
burden than an  annual fee. Mr. Hutchinson  answered that he                                                                    
had only  heard the  concern anecdotally.  It was  a concern                                                                    
that existed and, the bill  was attempting to move away from                                                                    
such a practice.                                                                                                                
Representative   Josephson   asked  how   his   constituents                                                                    
benefited  from   small  mines,   in  terms  of   rents  and                                                                    
royalties.  Mr. Hutchinson  deferred  to DNR  to answer  the                                                                    
Mr.  Goodrum replied  mining was  an  important industry  in                                                                    
Alaska. Every  year it contributed  a significant  amount of                                                                    
money  to  the  states    coffers.  Within  DNR,  the  state                                                                    
collected  rental payments  annually  in addition  to or  in                                                                    
lieu of  labor payments made.  Miners were also  required to                                                                    
make royalty  payments to the  state when they  produced. He                                                                    
continued that miners paid other  taxes to the Department of                                                                    
Revenue (DOR)  pulling in far  more money than DNR  from the                                                                    
mining industry.  He noted presentations  being done  in the                                                                    
Senate  Resources Committee  in  which many  of the  numbers                                                                    
were captured  from the mining industry.  He reiterated that                                                                    
mining had  been an important  part of Alaskas   history and                                                                    
would be a critical industry going forward in the state.                                                                        
Representative Josephson commented  that although there were                                                                    
mines throughout Alaska, they tended  to be regions like the                                                                    
Minto  area,   the  North  Star  Borough,   and  the  Seward                                                                    
Peninsula.  He   suggested  that   small  mines   were  more                                                                    
intensively located in certain parts  of the state. He asked                                                                    
if  he   was  correct.   Mr.  Hutchinson  answered   in  the                                                                    
Representative  Wool wanted  to better  understand the  term                                                                    
"carry  forward"   as  mentioned  by  Co-Chair   Foster.  He                                                                    
provided an  example. He  asked, if a  miner spent  $5000 in                                                                    
one year for dirt work, whether  it would carry the claim 50                                                                    
years.  Mr.   Hutchinson  deferred   the  question   to  the                                                                    
Mr.  Goodrum  responded that  if  a  person held  10  mining                                                                    
claims and  the requirement  was for $100  of labor  on each                                                                    
claim which  would be  a total  of $1000 to  be done  in the                                                                    
year.  It could  all be  done on  one of  the claims  if the                                                                    
miner  was  developing  them  sequentially  such  as  moving                                                                    
upstream. If  there was a  positive balance of  annual labor                                                                    
that was completed,  the labor could be  carried forward. He                                                                    
indicated  there  was  a  specified  amount  that  could  be                                                                    
carried forward which he thought  was for less than 5 years.                                                                    
He indicated that  Ramona Monroe was on the  phone and could                                                                    
provide additional detail.                                                                                                      
RAMONA  MONROE, ALASKA  MINERS  ASSOCIATION, ANCHORAGE  (via                                                                    
teleconference),  answered  that  the law  would  allow  the                                                                    
carry forward  to be applied in  the year the work  was done                                                                    
plus four sequential years if  there was sufficient labor to                                                                    
satisfy  the   labor  requirement  for  each   of  the  four                                                                    
subsequent years  for a  total of five  years. The  goal was                                                                    
that  at least  once every  five years  a miner  was working                                                                    
their land.                                                                                                                     
1:34:24 PM                                                                                                                    
Co-Chair Johnston OPENED public testimony.                                                                                      
KARL  HANNEMAN, ALASKA  MINERS  ASSOCIATION, ANCHORAGE  (via                                                                    
teleconference),  spoke in  support of  the legislation.  He                                                                    
was  a  member of  the  Alaska  Miners  Association  working                                                                    
group that  had advocated for  the changes presented  in the                                                                    
bill. The changes were  primarily process and administrative                                                                    
in nature.  The goal was  to improve the efficiency  and the                                                                    
relationship  between   the  miners  and  DNR.   It  was  an                                                                    
important  step   forward  in   terms  of   simplifying  the                                                                    
administration of mining claims.  He asked members for their                                                                    
consideration and thanked them for their time.                                                                                  
1:35:24 PM                                                                                                                    
Co-Chair Johnston CLOSED public testimony.                                                                                      
Co-Chair Johnston asked the department  to review the fiscal                                                                    
Mr.  Goodrum reviewed  the fiscal  impact  note [FN1  (DNR),                                                                    
OMB Component  Number 3002]  which essentially  covered what                                                                    
would be required  of the department to  do additional work.                                                                    
Under  current   statute  certain  activities   occurred  by                                                                    
operation  of law.  The bill  would create  a process  and a                                                                    
timeframe in which DNR employees  would need to make contact                                                                    
with  certain miners  and  to provide  the  time period  and                                                                    
window to  make administrative corrections. For  example, in                                                                    
FY  21 the  fiscal note  would be  $176,700 for  two Natural                                                                    
Resource  Specialist I  employees  to assume  the duties  of                                                                    
communicating  with  miners  to  ensure  mining  claims  and                                                                    
rental properties were properly maintained.                                                                                     
Representative  Knopp  asked  if the  positions  would  have                                                                    
other job  duties as  assigned or would  they be  limited to                                                                    
contacting miners.                                                                                                              
Mr.  Goodrum responded  that positions  would be  additional                                                                    
positions. Currently  there was  about 35,000  mining claims                                                                    
throughout  the  state.  The mining  section  had  about  20                                                                    
personnel actively manning them.  The fiscal note would come                                                                    
from program  receipts generated  from the  mining industry.                                                                    
He  reported that  in FY  19 the  mining industry  generated                                                                    
$5.4  million  to  DNR  alone.  The  Department  of  Revenue                                                                    
received  several  other  monies   related  to  mining.  The                                                                    
program receipts  would be generated  by the  department and                                                                    
the  Division   of  Mining,  Land  and   Water  from  mining                                                                    
Representative Knopp  looked at the fourth  paragraph of the                                                                    
fiscal   note   that    discussed   the   Natural   Resource                                                                    
Specialist I. He  had only seen two  qualifications; A miner                                                                    
had to be a minimum of 18 years  of age and had to be a U.S.                                                                    
citizen. He wondered if there were other qualifications.                                                                        
Mr.  Goodrum noted  that  at  the beginning  of  the bill  a                                                                    
couple   of   sections   talked   about   modifications   to                                                                    
qualifications.  Some  of  them   had  to  do  with  limited                                                                    
liability    corporations   and    trusts.   However,    the                                                                    
preponderance  of  the  work  would  be  done  when  someone                                                                    
identified a potential error in  a Statement of Annual Labor                                                                    
and communication  with the potentially affected  miner. The                                                                    
specialist would  have to provide  a time and process  for a                                                                    
miner   to   amend,   correct,   or   cure   a   deficiency.                                                                    
Qualifications only played a small  part. The larger portion                                                                    
of  work  that would  be  done  by  the 2  Natural  Resource                                                                    
Specialists  would  be  working   with  mineral  tenure  and                                                                    
mineral rights  that were acquired and  properly maintaining                                                                    
Representative  Knopp  referred  to deficiency  notices.  He                                                                    
asked   about   deficiencies    other   than   annual   work                                                                    
1:40:02 PM                                                                                                                    
Mr. Goodrum  responded that the  positions would  be located                                                                    
in the Minerals Property Section  of DNR. He mentioned MTRSC                                                                    
claims  and  working  with miners  regarding  which  mineral                                                                    
rights  were  being  acquired  at the  time  of  filing  the                                                                    
claims. Sometimes  there might be other  private property or                                                                    
other   things  withheld.   The  two   positions  would   be                                                                    
corresponding with  miners to ensure that  the mining rights                                                                    
acquired  were  understood  by all  parties.  The  positions                                                                    
would ensure  that when corrections  needed to be  made, the                                                                    
department was  notifying and  corresponding with  miners to                                                                    
provide support for them in protecting their rights.                                                                            
Representative  Knopp noted  there was  nothing included  in                                                                    
the travel line on the fiscal  note. He asked Mr. Goodrum to                                                                    
Mr. Goodrum  answered that quite  likely employees  from the                                                                    
mining  section  would be  traveling  who  were involved  in                                                                    
permitting.  The division  did  over-flights throughout  the                                                                    
state to ensure  work was done in a proper  fashion. The two                                                                    
particular positions being discussed  would be more involved                                                                    
with  written correspondence  and  phone  calls rather  than                                                                    
traveling to the field.                                                                                                         
SB  155  was  HEARD  and   HELD  in  committee  for  further                                                                    
SENATE BILL NO. 134                                                                                                           
     "An Act relating to medical assistance reimbursement                                                                       
     for the services of licensed professional counselors;                                                                      
     and providing for an effective date."                                                                                      
1:42:38 PM                                                                                                                    
SENATOR DAVID WILSON, SPONSOR, indicated  that SB 134 was an                                                                    
act  relating to  medical assistance  reimbursement for  the                                                                    
services of licensed professional  counselors. The bill also                                                                    
benefited  all  Alaskans in  need  of  behavioral health  by                                                                    
expanding its  capacity. The legislation would  add licensed                                                                    
professional  counselors  (LPCs)  to the  Medicaid  optional                                                                    
services. The concept  of the bill was  to expand behavioral                                                                    
health   capacity   and   utilization  for   Alaskas    most                                                                    
vulnerable population.                                                                                                          
Senator  Wilson  continued  that Medicaid  clients  and  all                                                                    
Alaskans had difficulty finding  access to behavioral health                                                                    
care  often waiting  3 to  6 months  for appointments.  In a                                                                    
state of  crisis, they utilized the  most expensive platinum                                                                    
level  of care  there  was -  Alaskas   emergency rooms.  He                                                                    
asserted that in  current times, it was not  where they need                                                                    
to be. He  reported that it cost on average  about $4360 for                                                                    
behavioral  health assessment  in  Alaskas  emergency  rooms                                                                    
versus  about  $200  in  a  clinical  setting.  Adding  more                                                                    
counselors to  provide services in a  clinical setting would                                                                    
provide  Alaska  with improved  health  care  outcomes at  a                                                                    
lower cost. The bill would  provide the appropriate level of                                                                    
care  with an  appropriate level  of health  care providers.                                                                    
Costs  were rising  at an  unsustainable rate  and something                                                                    
needed   to  be   done  differently   to  stop   the  trend.                                                                    
Essentially,  Alaska  needed  to retool  its  factories  and                                                                    
systems  to  get more  productive  and  better outcomes  for                                                                    
Alaskan  citizens.  He  asserted that  SB  134  complimented                                                                    
HB 290,  SB 120  and  many other  pieces  of legislation  in                                                                    
terms of the 1115 waiver  to help provide a cost containment                                                                    
reduction  increasing   access  for  Alaskans   with  better                                                                    
outcomes  of behavioral  health services.  He believed  that                                                                    
other healthcare  providers in Alaska agreed,  as there were                                                                    
letters of  support and people  waiting to testify  in favor                                                                    
of the legislation. His staff,  Mr. Zepp, would be reviewing                                                                    
a PowerPoint Presentation for the committee.                                                                                    
1:45:16 PM                                                                                                                    
GARY ZEPP, STAFF,  SENATOR DAVID WILSON, began  with slide 2                                                                    
of  the  PowerPoint  presentation  titled "SB  134  "An  Act                                                                    
relating  to   medical  assistance  reimbursement   for  the                                                                    
services of licensed  professional counselors; and providing                                                                    
for an effective date" dated  March 22, 2020 (copy on file).                                                                    
He  relayed  that SB  134  would  add licensed  professional                                                                    
counselors to  the Medicaid  optional services.  The concept                                                                    
of  the  bill was  to  expand  capacity and  utilization  of                                                                    
behavioral health  care in  a clinical  preventative setting                                                                    
versus a state of crisis in Alaska's emergency rooms.                                                                           
Mr. Zepp  continued that the expansion  of behavioral health                                                                    
care was  projected to  reduce waiting  for services  and to                                                                    
improve  the quality  of care  by providing  the appropriate                                                                    
care  by the  appropriate healthcare  provider. He  reported                                                                    
that  it  would  cost  less than  behavioral  healthcare  in                                                                    
emergency  rooms across  the  state.  In conversations  with                                                                    
stakeholders, he heard about wait  times for substance abuse                                                                    
disorders,  suicide, depression,  trauma from  violence, and                                                                    
serious  mental  illness of  anywhere  from  3-6 months  for                                                                    
Medicaid  clients. It  was due  to a  workforce shortage  of                                                                    
behavioral  healthcare professionals  who were  available to                                                                    
see Medicaid clients.                                                                                                           
Mr. Zepp  thought everyone had  seen examples  of behavioral                                                                    
healthcare  shortages that  had  been  revealed in  peoples                                                                     
daily  lives  and through  stories  in  the media.  Licensed                                                                    
professional counselors were  a valuable cost-effective part                                                                    
of  treatment  for  behavioral  health  care.  The  proposed                                                                    
legislation was  a piece of  the behavioral  health capacity                                                                    
puzzle that already included  marital and family therapists,                                                                    
licensed  social  workers,  PhD  psychologists,  prescribing                                                                    
nurse practitioners, and  medical doctors like psychiatrists                                                                    
and primary  care physicians.  There were  approximately 717                                                                    
active   licensed  professional   counselors  available   in                                                                    
Mr.  Zepp turned  to slide  3  regarding behavioral  health.                                                                    
Many  people were  familiar with  the term  "mental health."                                                                    
Mental health covered many of  the same issues as behavioral                                                                    
health,  but  the  term   only  encompassed  the  biological                                                                    
component  of  the aspect  of  wellness.  He read  from  the                                                                    
     Behavioral  health  is  the  scientific  study  of  the                                                                    
     emotions,   behaviors,  and   biology  relating   to  a                                                                    
     person's mental  well-being, their ability  to function                                                                    
     in   everyday  life,   and  their   concept  of   self.                                                                    
     "Behavioral health"  is the  preferred term  to "mental                                                                    
     health."   A  person   struggling  with   his  or   her                                                                    
     behavioral   health   may  face   stress,   depression,                                                                    
     anxiety,   relationship  problems,   grief,  addiction,                                                                    
     attention-deficit/hyperactivity  disorder  or  learning                                                                    
     disabilities,  mood disorders,  or other  psychological                                                                    
     concerns.   Counselors,   therapists,   life   coaches,                                                                    
     psychologists, nurse  practitioners, or  physicians can                                                                    
     help manage behavioral  health concerns with treatments                                                                    
     such as therapy counseling or medication.                                                                                  
Representative LeBon  asked what the  minimum qualifications                                                                    
were  to  become  a  licensed   provider  of  mental  health                                                                    
services  to be  eligible  for  Medicaid reimbursement.  Mr.                                                                    
Zepp deferred  to the various  people online to  address the                                                                    
question.  Senator Wilson  thought Deputy  Commissioner Wall                                                                    
could answer Representative LeBons question.                                                                                    
1:49:11 PM                                                                                                                    
ALBERT   WALL,  DEPUTY   COMMISSIONER,  DHSS,   JUNEAU  (via                                                                    
teleconference),   responded  that   the  requirements   for                                                                    
licensure  rested with  occupational licensing.  An academic                                                                    
and professional background check  and a test were required.                                                                    
After making application and all  that was entailed a person                                                                    
would become  professionally licensed  in the state.  In the                                                                    
state  plan for  Medicaid,  the states   agreement with  the                                                                    
federal  government as  to how  it  handled Medicaid,  there                                                                    
were specific  definition of health care  provider types. He                                                                    
indicated that part of the  lengthy process of getting a new                                                                    
provider type  into the system  could be addressed  with the                                                                    
federal  government  after  a   bill  was  passed  with  the                                                                    
provider  type.  He  was describing  a  multi-step  process.                                                                    
First, a  provider had to  become an enrollable  provider in                                                                    
statute.  Second,  the state  had  to  add the  professional                                                                    
licensure to  Alaskas  state plan with  Centers for Medicare                                                                    
and Medicaid Services (CMS). Third,  regulations had to come                                                                    
after the  fact to put  together the framework in  which the                                                                    
new  license   type  could  bill   Medicaid.  There   was  a                                                                    
professional  licensure  board  that  had  oversite  of  the                                                                    
license. The  definition was included in  the agreement with                                                                    
the   federal  government   and   the   state  would   craft                                                                    
regulations in which to bill through.                                                                                           
Mr. Zepp considered  slide 4: "Why Medicaid  clients and who                                                                    
are they?" He read from a prepared statement:                                                                                   
     "Why  Medicaid  clients  and  who  are  they?  Medicaid                                                                    
     provides  health coverage  and long-term  care services                                                                    
     for  Alaska's   most  vulnerable:   children,  seniors,                                                                    
     people with disabilities, pregnant  women, and very low                                                                    
     income or working poor.                                                                                                    
     Medicaid  clients have  difficulties finding  access to                                                                    
     behavioral healthcare  and often have to  wait three to                                                                    
     six  months for  appointments.  So, you  can imagine  a                                                                    
     person  in crisis  or someone  who is  ready to  accept                                                                    
     behavioral  healthcare  services  and there  isn't  any                                                                    
     access  or are  told it's  available in  three or  four                                                                    
     months. So, what are  their options? Alaska's emergency                                                                    
     SB  134 would  directly impact  the lives  of our  most                                                                    
     vulnerable  population  of   citizens,  our  poor,  our                                                                    
     young, and  our seniors. Alaska's emergency  rooms have                                                                    
     been  overwhelmed  with  volumes of  Medicaid  client's                                                                    
     emergency situations in need  of behavioral health. The                                                                    
     leading cause  of emergency room  visit are  related to                                                                    
     alcohol  disorders  and   the  associated  aliments  of                                                                    
     alcohol abuse.                                                                                                             
     Often Medicaid clients  have nowhere else to  go due to                                                                    
     the  lack of  access  and the  lack  of capacity  which                                                                    
     causes patients  to stay much  longer in  the emergency                                                                    
     room than they should.  Typically, if a Medicaid client                                                                    
     is in a stage of crisis  and there is not access to the                                                                    
     appropriate  care,  they  leave the  facility  and  the                                                                    
     cycle  repeats  itself.  They  will   be  back  at  the                                                                    
     emergency room  because they are  open 24 hours  a day,                                                                    
     seven days a week."                                                                                                        
Mr. Zepp moved to slide  5: "Adult Untreated Behavior Health                                                                    
Statistics."  He indicated  that  the  following few  slides                                                                    
reflected  some of  the statistics  concerning  the lack  of                                                                    
behavioral health  care, both nationally and  within Alaska.                                                                    
He read from a prepared statement:                                                                                              
     Approximately,  70  percent   of  American's  who  need                                                                    
     behavioral  health services  do not  receive treatment.                                                                    
     For substance use disorders it's  about 92 percent that                                                                    
     typically  do not  receive treatment;  and adults  with                                                                    
     serious   mental   health  issues,   approximately   66                                                                    
     percent, do not receive behavioral health treatment.                                                                       
     Without treatment  in a timely  manner, this  often can                                                                    
     lead  to  interactions  with   the  police,  the  court                                                                    
     systems,  and the  correctional  facilities within  our                                                                    
     According  to  the   "Bureau  of  Justice  Statistics",                                                                    
     approximately 51.4  percent of prisoner have  a serious                                                                    
     psychological  distress and/or  a history  of a  mental                                                                    
     health  problem    20 percent  of those  are considered                                                                    
     "severely and persistently" mentally ill.                                                                                  
Mr. Zepp discussed children  untreated for behavioral Health                                                                    
on  slide 6.  He relayed  that  the chart  showed levels  of                                                                    
depression, anxiety, and behavioral  health disorders by age                                                                    
for children. He read from a prepared statement:                                                                                
     "As you can see, children  are very much susceptible to                                                                    
     behavioral  health  issues.  Common  behavioral  health                                                                    
     issues   that    our   children    experience   include                                                                    
     depression,  anxiety,  behavioral  disorders,  and  the                                                                    
     most  common  which is  attention-deficit/hyperactivity                                                                    
     disorder (ADHD). A child  diagnosed with depression has                                                                    
     approximately  a  74 percent  chance  of  having a  co-                                                                    
     disorder, like  anxiety. If a  child is  diagnosed with                                                                    
     depression and anxiety disorders,  if not treated, they                                                                    
     usually increase over time,  and the child's behavioral                                                                    
     health condition worsens.                                                                                                  
     Boys  are more  likely  than girls  to  have a  mental,                                                                    
     behavioral,  or  developmental  disorder  and  children                                                                    
     living below  the poverty line  have a 22  percent more                                                                    
     likelihood  of a  mental, behavioral,  or developmental                                                                    
     SB   134  can   expand  the   capacity  of   behavioral                                                                    
     healthcare  in our  schools, our  communities, and  our                                                                    
     healthcare facilities."                                                                                                    
1:54:35 PM                                                                                                                    
Mr. Zepp continued to slide 7 which discussed the Alaska                                                                        
assessment of behavioral health care needs. He read from a                                                                      
prepared statement:                                                                                                             
     Mental  disorders  among  children  can  cause  serious                                                                    
     changes in  the way  children typically  learn, behave,                                                                    
     or handle  their emotions,  which causing  distress and                                                                    
     problems throughout the day.                                                                                               
     This is absolutely tragic, and  you have probably heard                                                                    
     this   previously,  but   according  to   the  American                                                                    
     Foundation  for Suicide  Prevention, the  Alaska Bureau                                                                    
     of Vital  Statistics, and the  State of  Alaska, Office                                                                    
     of Epidemiology:                                                                                                           
     Alaska has  the highest rate  of suicide per  capita in                                                                    
     the country;                                                                                                               
     In Alaska, suicide  is the number one  leading cause of                                                                    
     death for ages 10-64;                                                                                                      
     Alaska rate is 21.8 suicides  per 100,000 people and in                                                                    
     rural Alaska it is 35.1 per 100,000;                                                                                       
     There  was a  13 percent  increase in  suicides between                                                                    
     2013-2017, as compared to 2007-2011;                                                                                       
     Toxicology results  following suicides since  2015 show                                                                    
     70  percent  involved  one  or  more  substances,  most                                                                    
     frequently alcohol;                                                                                                        
     More than 90 percent of  people who die by suicide have                                                                    
     depression   or   diagnosable,  treatable   mental   or                                                                    
     substance abuse disorder."                                                                                                 
Mr. Zepp turned to slide 8: "Alaska assessment of                                                                               
behavioral health care needs." He continued to read from a                                                                      
prepared statement:                                                                                                             
     "Later in  our presentation, the expert  testimony will                                                                    
     be able  to shed a  light on the workforce  shortage of                                                                    
     behavioral healthcare  professional available  to treat                                                                    
     Medicaid clients and Alaskans in general.                                                                                  
     The  2016 Alaska  Behavioral Health  Systems Assessment                                                                    
     Report estimated that 145,790  adult Alaskans   roughly                                                                    
     20% of the state's  population - need behavioral health                                                                    
     services. Despite the estimated  need for mental health                                                                    
     care in  Alaska, the ratio  of mental  health providers                                                                    
     to population is low compared to national levels.                                                                          
     Also,  most  behavioral  health professionals  work  in                                                                    
     urban  areas and  in remote  areas of  the state,  they                                                                    
     have even lower provider/population ratios."                                                                               
Mr. Zepp moved to the chart on slide 9: "Alaska Emergency                                                                       
Room Department Super-Utilizer Facts Total Medicaid Billed                                                                      
Charges." He read from his prepared statement:                                                                                  
     "The  chart  above reflects  the  total  cost that  the                                                                    
     State  of  Alaska  has  paid  to  emergency  rooms  for                                                                    
     Medicaid   clients  throughout   our  state   over  the                                                                    
     previous four years.                                                                                                       
     As  you can  see, in  2016  the total  costs were  $233                                                                    
     million + and that amount  has risen over the last four                                                                    
     years by $47.1 million dollars or 21.1 percent.                                                                            
     As an example, in 2019,  the top 2.9 percent of "super-                                                                    
     utilizers" consumed 16.3 percent  of the charges at $46                                                                    
     million dollars  (1,301 clients at  an average  cost of                                                                    
     $35,357  annually).  They had  10  visits  or more  per                                                                    
     year, some as much as 50 visits per year.                                                                                  
     If we count the  top 10.03 percent of "super-utilizers"                                                                    
     (6,250 Medicaid clients) costs  $114.0 million or 40.67                                                                    
     percent of  the total  charges annually  (6,250 clients                                                                    
     at an  average cost  of $18,240  annually). They  had 5                                                                    
     visits or more per year.                                                                                                   
     Costs are rising  at an unsustainable rate  and we have                                                                    
     to do something  different to stop this  trend. We need                                                                    
     to  improve  Medicaid  programs and  provide  increased                                                                    
     quality  and become  more cost  efficient. We  believe,                                                                    
     and  other healthcare  providers  in  Alaska agree,  by                                                                    
     adding more LPC counseling services, we have a chance                                                                      
     to improve these outcomes.                                                                                                 
1:58:31 PM                                                                                                                    
Representative  Josephson  asked   what  was  typically  the                                                                    
reason  for  an appointment.  Mr.  Zepp  responded that  the                                                                    
majority of Medicaid clients were  seen in Alaska  emergency                                                                    
rooms   for   substance  abuse   disorders.   Representative                                                                    
Josephson assumed people were going through withdrawals.                                                                        
Co-Chair  Johnston indicated  there were  some folks  online                                                                    
that  would likely  be answering  Representative Josephsons                                                                     
Representative  Wool  asked  if  the  increase  in  Medicaid                                                                    
billed charges for emergency room  services in 2018 and 2019                                                                    
was due to  Medicaid expansion. He had  heard from hospitals                                                                    
prior  to Medicaid  expansion that  they had  several people                                                                    
going to  the emergency room,  as it was their  only option.                                                                    
The  hospitals were  not billing  because  Medicaid was  not                                                                    
available at  the time.  He suspected  that the  increase in                                                                    
charges was  a result  of an  increase in  Medicaid patients                                                                    
through  the   expansion.  Mr.   Zepp  deferred   to  Deputy                                                                    
Commissioner Wall.                                                                                                              
Representative  LeBon   asked  how  emergency   room  repeat                                                                    
customers  were intercepted  and directed  to providers.  If                                                                    
people were  to continue  the pattern of  showing up  to the                                                                    
emergency room, the  hospital would not refuse  to treat the                                                                    
Senator Wilson  responded that the Mat-Su  Health Foundation                                                                    
had the  High Utilizer  Mat-Su (HUMS) Project.  He indicated                                                                    
members likely  had an information  sheet in  their packets.                                                                    
It  reflected  an  intensive  case  management  program.  He                                                                    
believed Providence had  a similar program in  place and had                                                                    
seen  a significant  drop  in expenses.  In  talks with  the                                                                    
Mat-Su  Foundation  and  Providence,   he  found  that  they                                                                    
diverted  patients  for  which   they  could  not  bill  for                                                                    
services.  He  also  noted another  information  sheet  that                                                                    
talked about  Medicaid super utilizers and  why they entered                                                                    
emergency rooms,  many of which were  experiencing substance                                                                    
abuse or behavioral health issues.                                                                                              
Mr.  Zepp continued  with his  prepared statement  regarding                                                                    
slide 9:                                                                                                                        
     "With the  federal approval of state's  1115 waiver for                                                                    
     behavioral healthcare  services and  by adding  LPCs to                                                                    
     the  mix  of  behavioral  healthcare  professionals  it                                                                    
     offers an opportunity to  expand capacity, increase the                                                                    
     quality  of care,  lower the  costs  versus the  crisis                                                                    
     mode at  the platinum  level costs  that the  state has                                                                    
     already paid.                                                                                                              
     I'll repeat, the amounts shown  above is what the state                                                                    
     has  already  paid on  behalf  of  Medicaid clients  in                                                                    
     Alaska  for emergency  room visits  over the  last four                                                                    
2:02:29 PM                                                                                                                    
Mr.  Zepp  continued to  slide  10:  "Alaska Emergency  Room                                                                    
Department   Super-Utilizer   Facts   Number   of   Medicaid                                                                    
Clients." He read from a prepared statement:                                                                                    
     "The  chart above  shows that  the  number of  Medicaid                                                                    
     clients in  our emergency rooms have  not increased but                                                                    
     the costs have.                                                                                                            
     The  most  common diagnoses  for  the  top 2.7  percent                                                                    
     super-utilizers are  alcohol-related disorders  and the                                                                    
     associated ailments;                                                                                                       
     The top 2.7 percent  of "super-utilizers" are likely to                                                                    
     be between  20-59 years  old &  61 percent  are females                                                                    
     and 39 percent are males."                                                                                                 
Representative Tilton  posed a question about  how to change                                                                    
a  persons   behavior  who was  consistently  going  to  the                                                                    
emergency  room because  it was  what they  knew to  do. Mr.                                                                    
Zepp suggested  that in  a few  minutes the  committee would                                                                    
hear  from  the  Mat-Su  Health Foundation  and  from  Jared                                                                    
Kosin,  the CEO  of the  Alaska State  Hospital and  Nursing                                                                    
Home Association  (ASHNA). Currently, they had  two programs                                                                    
that  had been  in  practice  for about  2  years that  were                                                                    
experiencing  success in  rerouting patients  away from  the                                                                    
emergency  room to  a clinical  setting.  Both programs  had                                                                    
achieved health improvements and cost savings.                                                                                  
Representative  Tilton  asked  if the  bill  would  increase                                                                    
availability   of  substance   abuse  providers.   Mr.  Zepp                                                                    
responded affirmatively.  He noted that in  2018 the Senator                                                                    
had sponsored  SB 105 which  added licensed,  marital family                                                                    
therapists  to the  Medicaid optional  services. He  thought                                                                    
there was a stereo type  in place regarding licensed marital                                                                    
therapists  and  licensed  professional  counselors     that                                                                    
their  scope  was  limited  in  terms  of  what  they  could                                                                    
provide.  However,  the  counselors  could  provide  a  wide                                                                    
variety of  services up to, but  excluding, the prescription                                                                    
of drugs.  Licensed therapists could handle  many modalities                                                                    
including:  substance  abuse, anxiety,  schizophrenia,  mood                                                                    
disorders, and depression.                                                                                                      
Mr.  Zepp continued  to slide  11: "Preventative  behavioral                                                                    
health  care can  reduce costs."  He  continued reading  his                                                                    
prepared statement:                                                                                                             
     "There is  good news however.  Since the passage  of SB
     105,   which   added   licensed  martial   and   family                                                                    
     therapists to  the Medicaid Optional  Services. Several                                                                    
     programs  aimed  at  diverting  Medicaid  clients  from                                                                    
     emergency  rooms  into more  comprehensive  coordinated                                                                    
     care models are in practice right now.                                                                                     
     As you'll hear from Mr.  Jared Kosin, the President and                                                                    
     CEO  of  the Alaska  State  Hospital  and Nursing  Home                                                                    
     Association  and  hopefully   from  the  Mat-Su  Health                                                                    
     Foundation  ladies,  Ms.  Elizabeth  Ripley  and  Robin                                                                    
     Minard. Programs  are diverting  "Super-Utilizers" from                                                                    
     our  emergency  rooms  in  Alaska   to  a  clinical  or                                                                    
     coordinated care setting and  it does save money. These                                                                    
     two are examples  that are working in  Alaska right now                                                                    
     and  achieving significant  results. Most  importantly,                                                                    
     the Medicaid clients are  receiving improved quality by                                                                    
     the   appropriate   healthcare   professions   but   at                                                                    
     substantially  reduced costs.  This saves  the Medicaid                                                                    
     program  money!   By  adding  capacity   with  Licensed                                                                    
     Professional  Counselors  to   assist  with  behavioral                                                                    
     healthcare  issues,  this  enhances those  programs  as                                                                    
     well as other private practice clinical settings too.                                                                      
     We  did want  to  touch  on the  fiscal  note from  our                                                                    
     friends  at   the  Department  of  Health   and  Social                                                                    
     Services.   It's  understood   they  have   to  provide                                                                    
     estimates of  what programmatic  changes may  costs but                                                                    
     we believe there is more to the story."                                                                                    
Mr. Zepp  thanked the stakeholders that  supported the bill.                                                                    
He revealed a list of the stakeholders on the final slide.                                                                      
Co-Chair  Johnston  thanked  the presenters  and  encouraged                                                                    
invited testimony to begin.                                                                                                     
2:08:52 PM                                                                                                                    
JARED KOSIN,  PRESIDENT AND CHIEF EXECUTIVE  OFFICER, ALASKA                                                                    
STATE HOSPITAL AND NURSING  HOME ASSOCIATION, ANCHORAGE (via                                                                    
teleconference), indicated  the association  fully supported                                                                    
SB 134  and thought it was  smart policy and a  smart use of                                                                    
resources. He suggested the  legislation would reduce visits                                                                    
to emergency rooms. Utilization would  be reduced in 2 ways.                                                                    
First,  it  would  create  direct  access  to  care  in  the                                                                    
community. In  response to Representative  Tiltons  question                                                                    
regarding how  to change behavior, he  suggested that people                                                                    
would  have   an  option   other  than   going  to   a  high                                                                    
level-of-care  emergency  department.   He  thought  it  was                                                                    
reasonable to think people would  go to another provider for                                                                    
care.  For those  people that  were hard-wired  to go  to an                                                                    
emergency room,  they could be  redirected via  a successful                                                                    
discharge  from an  emergency  department.  He relayed  that                                                                    
currently in  the system of  care, with the  capacity issues                                                                    
at Alaska  Psychiatric Institute (API), patients  were going                                                                    
to  the  emergency  room  in   crisis,  being  converted  to                                                                    
Title 47 ex-parte  patients, and were boarding  at emergency                                                                    
departments  for days  at a  time while  they waited  for an                                                                    
inpatient bed. Patients would then  be discharged from their                                                                    
inpatient  bed and  would show  back up  at emergency  rooms                                                                    
perpetuating a vicious cycle.  The legislation would provide                                                                    
emergency  departments  with the  option  of  making a  warm                                                                    
handoff  to  a counselor  in  the  community. The  counselor                                                                    
could then  take the  patient working with  them on  a long-                                                                    
term basis. Such capacity was  currently non-existent or, if                                                                    
it did  exist, it was  on a very  low level. The  bill would                                                                    
allow  for more  continuity of  care. He  sincerely believed                                                                    
SB 134  would   decrease  health  care  costs   rather  than                                                                    
increase  them. Ultimately,  the bill  would save  the state                                                                    
money. He urged members to support the bill.                                                                                    
2:13:00 PM                                                                                                                    
Representative  Tilton  referenced   Mr.  Kosins   statement                                                                    
about  the  bill  allowing   hospitals  to  make  successful                                                                    
discharges because  they would  have the  ability (currently                                                                    
not  in existence)  to handoff  patients  to providers.  She                                                                    
asked if  capacity of providers  or the lack of  the ability                                                                    
to bill Medicaid influenced  why behavioral health providers                                                                    
were not presently used.                                                                                                        
Mr. Kosin  responded that both  applied. He used  the Mat-Su                                                                    
Regional  Medical Center  as an  example. It  had a  private                                                                    
family practice  as part of  its network of  services called                                                                    
Solstice Family  Care. Solstice Family  Care had  a licensed                                                                    
clinician   who   could   provide  services   for   Medicaid                                                                    
recipients.  However, currently  there  was no  way to  bill                                                                    
Medicaid  for its  services. He  asserted  that without  the                                                                    
ability to bill  for services, the entity could  not stay in                                                                    
business  for very  long. The  bill  would allow  for a  new                                                                    
avenue   for  discharging   patients   from  the   emergency                                                                    
department to  the clinician at  Solstice Family  Care, work                                                                    
with the  patient on  a plan  of care  to help  them through                                                                    
episodes  that  would  otherwise   land  them  back  in  the                                                                    
emergency room,  and bill Medicaid.  The cost for  15 visits                                                                    
to the  clinician would  equal approximately  the same  as a                                                                    
single  visit  to the  emergency  room.  The economics  were                                                                    
Representative  Carpenter  asked  about the  likelihood  the                                                                    
federal  government  would approve  professional  counseling                                                                    
services.  He wondered  if there  were already  other states                                                                    
that include it in their services.                                                                                              
Mr.  Zepp  reported  having  reached  out  to  the  National                                                                    
Council  of State  Legislatures  to do  some research.  They                                                                    
found  that about  6 states  including Montana,  Washington,                                                                    
and   Oregon,  had   already  added   licensed  professional                                                                    
counselor services to their Medicaid optional services.                                                                         
2:15:55 PM                                                                                                                    
ROBIN  MINARD,   MAT-SU  HEALTH  FOUNDATION,   WASILLA  (via                                                                    
teleconference),   relayed   that  the   Foundation   shared                                                                    
ownership  in   the  Mat-Su  Regional  Medical   Center  and                                                                    
invested its  profits back  into the  community in  order to                                                                    
improve  the  health  and wellness  of  Alaskans  living  in                                                                    
Mat-Su. She was testifying in  strong support of SB 134. The                                                                    
bill was crucial because it  would help address an important                                                                    
health  issue facing  Mat-Su residents  every  day -  mental                                                                    
health  and substance  use  problems. Licensed  professional                                                                    
counselors were  key behavioral  health providers  who could                                                                    
help with the mental health and substance use issues.                                                                           
Ms.  Minard  continued that  the  Foundation  was aware  the                                                                    
issues were difficult for Mat-Su  residents because they had                                                                    
stated  as much  in the  previous 3  community health  needs                                                                    
assessments.  She  reported  that   in  2013  residents  and                                                                    
professionals stated  that the  top 5 challenges  they faced                                                                    
were  alcohol  and  substance abuse,  children  experiencing                                                                    
trauma  and  violence,   depression  and  suicide,  domestic                                                                    
violence  and   sexual  assault,  and  lack   of  access  to                                                                    
behavioral health  care. Residents  with the list  of issues                                                                    
could be helped with access  to counseling. School nurses in                                                                    
the  same  survey  were  seeing waiting  lists  as  long  as                                                                    
4-8 months for  children and families  that had  Medicaid to                                                                    
get into  see a counselor -  much too long to  have to wait.                                                                    
It  was   crucial  that  Alaska  residents   had  access  to                                                                    
behavioral health  providers for care before  their problems                                                                    
escalated to the state of crisis.                                                                                               
Ms.  Minard continued  that Mat-Su  Regional Medical  Center                                                                    
and the  community was  inundated by  residents who  were in                                                                    
crisis related  to behavioral health  issues. In  2016, 3443                                                                    
residents  were  seen in  the  emergency  department with  a                                                                    
primary behavioral  health diagnosis,  and those  people had                                                                    
8400 visits  costing $43.8 million in  facility charges. The                                                                    
cost  did   not  include  the  costs   associated  with  law                                                                    
enforcement  or emergency  transportation. The  average cost                                                                    
per visit was  over $5000 and, the average  cost per patient                                                                    
was almost $13,000.                                                                                                             
Ms.  Minard noted  the senator  mentioning the  HUMS Program                                                                    
earlier  in  the meeting.  She  explained  that HUMS  was  a                                                                    
program  supported  by  the Mat-Su  Health  Foundation,  the                                                                    
program was  started as a  way to provide  care coordination                                                                    
and  access to  community support  for high  utilizers. High                                                                    
utilizers were defined  as residents who have had  5 or more                                                                    
visits to  the emergency department  in a year and  who were                                                                    
unable to independently  access consistent, appropriate care                                                                    
in the community.  The HUMS program had  already resulted in                                                                    
dramatic cost  savings. It  had also  alleviated significant                                                                    
trauma for  patients as  well as  health care  providers and                                                                    
families who  often suffered trauma along  with the patient.                                                                    
She urged members, as they delved  into the data, to keep in                                                                    
mind that  if people had  access to care before  their needs                                                                    
became a crisis, there would be  far less need for a program                                                                    
such as HUMS.                                                                                                                   
Ms. Minard relayed  some of the results of  the HUMS Program                                                                    
to-date. She reported a cost  savings of $2.168 million over                                                                    
2 years. In 2018, the top  3 utilizers saved $340,288 by not                                                                    
making  emergency department  visits.  In the  same year,  7                                                                    
patients  did  not visit  the  emergency  department at  all                                                                    
after they  enrolled in the  HUMS Program. She  relayed that                                                                    
enrollment was  voluntary for  the patient.  The age  of the                                                                    
patients ranged from  16-82, and 72 percent  had Medicaid as                                                                    
their  health insurance.  She reiterated  the importance  of                                                                    
Medicaid  clients having  access to  the whole  continuum of                                                                    
care.  The  program  had  an   external  evaluator  and  the                                                                    
Foundation was  still learning and  tweaking the  program to                                                                    
make it more effective and less expensive as time passed.                                                                       
Ms.  Minard shared  a  couple of  success  stories from  the                                                                    
program thus  far. The first  was a young adult  client that                                                                    
had had 17  visits to the emergency department  in the prior                                                                    
year.  They  had poorly  managed  diabetes  and a  substance                                                                    
abuse disorder.  Most of  their emergency  department visits                                                                    
lead  to inpatient  admission into  the intensive  care unit                                                                    
(ICU). They had  a long history of IV drug  use and was non-                                                                    
compliant  with  primary  care appointments.  She  continued                                                                    
that when the  person was referred to the  HUMS Program, the                                                                    
outlook was  poor, and HUMS  staff were told the  client had                                                                    
little  or no  interest in  improving their  situation. With                                                                    
time and  a listening  ear, the HUMS  staff built  a rapport                                                                    
with  the person  and  it quickly  became  obvious that  the                                                                    
desire for a healthier life  existed. She was happy to share                                                                    
that  the client  was currently  sober;  their diabetes  was                                                                    
well  managed;  they  had  a  driver's  license;  they  were                                                                    
working a full-time  job; and they had  a great relationship                                                                    
with the primary providers office.                                                                                              
Ms. Minard  presented a second  example. Another  client had                                                                    
been  extremely  proactive  with their  care  and  improving                                                                    
their own  quality of life.  They had been able  to maintain                                                                    
sobriety  for  over  6  months  and  enrolled  in  parenting                                                                    
classes to become a better  parent in the hopes of regaining                                                                    
custody of  their child. The program  assisted with housing,                                                                    
getting  them into  substance  use  disorder treatment,  and                                                                    
with  purchasing  needed  hygiene and  clothing  items.  The                                                                    
person  had gained  and maintained  steady  employment at  a                                                                    
restaurant in walking  distance of where they  lived so they                                                                    
could get to work. The  client was currently saving money to                                                                    
get  their  own  apartment.  She  concluded  that  the  HUMS                                                                    
Program showed  great promise. However, even  more promising                                                                    
was the idea  that if there was more  behavioral health care                                                                    
available earlier on,  the HUMS program might  not be needed                                                                    
in the  future. The  hope was  for people to  get care  in a                                                                    
lower cost  setting. She understood there  was concern about                                                                    
adding  costs  to the  Medicaid  System.  She asserted  that                                                                    
SB 134  would do  the opposite;  it  would allow  behavioral                                                                    
health  care to  be provided  in the  least costly  setting,                                                                    
thus, avoiding  all of  the more  expensive care  later. She                                                                    
thanked members for their time.                                                                                                 
2:22:15 PM                                                                                                                    
Co-Chair Johnston OPENED Public Testimony.                                                                                      
JON  ZASADA,  POLICY  INTEGRATION DIRECTOR,  ALASKA  PRIMARY                                                                    
CARE ASSOCIATION,  ANCHORAGE (via teleconference),  spoke in                                                                    
support of SB 134. He read from a prepared statement:                                                                           
     "Alaskas    2   federally  qualified   health   centers                                                                    
     actively support  SB 134 adding  Medicaid reimbursement                                                                    
     for  LPCs has  been a  top priority  in our  efforts to                                                                    
     expand access  to behavioral  health services  for many                                                                    
     Community  health centers  are  already  using LPCs  in                                                                    
     their  practices  to   provide  school-based  services,                                                                    
     individual   counseling   services,   substance   abuse                                                                    
     disorder    treatment,   and    in   supporting    care                                                                    
     coordination   activities.   And  this   does   include                                                                    
     individual coaching on basic  health and hygiene issues                                                                    
     such as  were  addressing now with  the COVID epidemic.                                                                    
     However,  these  services  provided  by  LPCs  are  not                                                                    
     currently  reimbursable. They  are  currently paid  for                                                                    
     through  earned  income,   federal  and  private  grant                                                                    
     funds. This is not sustainable.                                                                                            
     Health  centers  have   received  considerable  federal                                                                    
     funding  to expand  behavioral health  services in  the                                                                    
     primary  care setting.  They  are  required to  provide                                                                    
     behavioral healthcare that  is integrated with medical,                                                                    
     dental, pharmacy,  and other  services. Adding  LPCs to                                                                    
     the  roster   of  billable  providers   enables  health                                                                    
     centers to  make their services more  sustainable. This                                                                    
     is the national best practice.                                                                                             
     LPCs are a valuable,  cost-effective component of team-                                                                    
     based   whole-person   care.   This   is   particularly                                                                    
     important right now as we  are doing everything that we                                                                    
     can  to  keep  patients  out  of  emergency  rooms  and                                                                    
     hospitals.  Mild and  moderate  anxiety and  depression                                                                    
     are  co-occurring  conditions with  chronic  conditions                                                                    
     including diabetes  and hypertension.  LPS are  a vital                                                                    
     provider  type that  can  typically provide  short-term                                                                    
     counseling  support that  enhances  the  work of  other                                                                    
     medical,   dental,  and   pharmacy   team  members   in                                                                    
     stabilizing  and  improving   the  health  of  emergent                                                                    
     patients  and   assisting  them  in   managing  chronic                                                                    
     conditions over time.                                                                                                      
     Finally,  in 2017,  Alaska  health  centers reported  a                                                                    
     deficit  of  12-18  behavioral  health  providers  that                                                                    
     could  expand   access  to  6000  to   9000  additional                                                                    
     patients. We  support SB 134.  It addresses a  key need                                                                    
     in  Alaskas   response   to  behavioral  health,  lends                                                                    
     stability  to  efforts  already  underway,  and  offers                                                                    
     another  tool in  our response  to  improving care  and                                                                    
     lowering the overall cost of care."                                                                                        
Mr. Zasada thanked the committee for its time.                                                                                  
2:25:24 PM                                                                                                                    
DON BLACK, EXECUTIVE DIRECTOR, BETHEL FAMILY CLINIC, BETHEL                                                                     
(via teleconference), introduced himself and read a                                                                             
prepared statement:                                                                                                             
     "Our clinic  employs one  licensed clinical  worker and                                                                    
     one licensed  professional counselor in  our behavioral                                                                    
     health  department.   When  I   last  spoke,   we  were                                                                    
     providing  services  to  teens   at  the  Bethel  Youth                                                                    
     Facility  in  efforts  to  reverse  destructive  habits                                                                    
     while  these students  are still  young. Our  substance                                                                    
     abuse programs  were embedded in the  community as well                                                                    
     as  at the  Yukon-Kuskokwim  Correctional Center  where                                                                    
     our staff provided group and individualized guidance.                                                                      
     All that  is gone  while we  hunker down.  Although our                                                                    
     delivery  has   changed,  our  services   continue.  We                                                                    
     continue  in more  individualized  services and,  where                                                                    
     possible,  by  electronic medium.  More  individualized                                                                    
     services stretch  our staff thin, but  limited Medicaid                                                                    
     billable  staff   stretches  us  even   thinner.  Were                                                                     
     venturing  into  the unknown.  We  have  no numbers  to                                                                    
     support where we  are going. We just know,  we just all                                                                    
     know, we are going there.                                                                                                  
     Look   around  the   room,  or   if  you   are  meeting                                                                    
     electronically as  I am, imagine youre   looking around                                                                    
     the room.  See not just  the faces of  your colleagues.                                                                    
     See  not just  the names  of your  colleagues. See  the                                                                    
     person. We  are all  gathering on a  Sunday, not  as an                                                                    
     ordinary  day  but as  a  day  to accomplish  important                                                                    
     business in the time  remaining this session Meanwhile,                                                                    
     there is a wave coming. We  dont  know how hard it will                                                                    
     hit. We dont  know when it  will hit. We just know that                                                                    
     it will  hit, and there  is nothing  we can do  to stop                                                                    
     it. And we  cant  even swim, just  float. This stressor                                                                    
     just entered all of our lives.                                                                                             
     Some of  those people around  the room or  virtual room                                                                    
     will  cope with  this stressor  better than  others. It                                                                    
     doesnt  matter how  we cope or appear to cope  it was a                                                                    
     stressor  for   everyone.  Many  of  you   have  coping                                                                    
     mechanisms to help you relax    a morning cup of coffee                                                                    
     and  a  newspaper at  the  local  coffee shop.  Closed.                                                                    
     Church  closed. A  relaxing dinner  with loved  ones or                                                                    
     friends after  a long day    closed. A trip to  the gym                                                                    
     or local pool to work  off some anxiety, relax, and re-                                                                    
     center   all  closed. We are helping  our clients build                                                                    
     mental  and emotional  tools to  help them  address the                                                                    
     stressors  in  their  own  lives. Now  we  have  a  new                                                                    
     stressor  to  add  to  the  list.  We  anticipate  more                                                                    
     individualized time will be  needed. We also anticipate                                                                    
     a  potential flood  in demand  of  these services.  For                                                                    
     those in the Medicaid world,  we may have to triage and                                                                    
     choose between  which services  are billable  and which                                                                    
     services are not.                                                                                                          
     I just  closed my  dental office on  Friday and  am re-                                                                    
     purposing as  many staff as  possible to assist  in the                                                                    
     increased needs in other areas  of our clinic. With the                                                                    
     reduction  in some  services, the  revenue  to run  the                                                                    
     clinic  becomes more  of  a concern.  When  I triage  a                                                                    
     behavioral  health patient,  part of  that formula  may                                                                    
     have  to  include  the sustainability  of  the  overall                                                                    
     clinic  when  it should  be  the  greater need  of  the                                                                    
     patient. Passing SB 134 allows  me to focus more on the                                                                    
     patients   needs  and  less  on  the  financial  needs.                                                                    
     Passing SB  134 allows me  to have access to  a broader                                                                    
     range  of billable  behavioral health  specialist labor                                                                    
     pool. It amazes me how  an entire globe is pivoting all                                                                    
     in the  same direction all  at this very same  point in                                                                    
     time. SB  134 has become  something different to  me in                                                                    
     the past few weeks. It has become our essential part                                                                       
     of that pivot."                                                                                                            
2:29:15 PM                                                                                                                    
ERIC  BOYER, PROGRAM  OFFICER,  ALASKA  MENTAL HEALTH  TRUST                                                                    
AUTHORITY,  ANCHORAGE  (via  teleconference),  indicated  he                                                                    
also  served   as  the  chair  for   the  Alaska  Healthcare                                                                    
Workforce Coalition.  The Coalitions   primary focus  was to                                                                    
increase  the workforce  in the  healthcare industry  across                                                                    
Alaska. The Trust  and the Coalition supported SB  134 to be                                                                    
able   to   expand   the   number   of   behavioral   health                                                                    
practitioners  who could  bill for  Medicaid services  which                                                                    
would   increase  the   responsiveness  of   the  healthcare                                                                    
community. People  experiencing behavioral  health disorders                                                                    
could be treated when they  needed the help versus being put                                                                    
on a waitlist.                                                                                                                  
Mr.  Boyer continued  that the  Alaska  Mental Health  Trust                                                                    
Authority (AMHTA)  was concerned about  Trust beneficiaries'                                                                    
lives being  improved. Beneficiaries included  Alaskans with                                                                    
mental    health    issues,   substance    use    disorders,                                                                    
developmental disabilities, Alzheimer's  Disease and related                                                                    
dementia, and  traumatic brain  injury. In  partnership with                                                                    
the  Department of  Health and  Social  Services, the  Trust                                                                    
ensured Alaska had a comprehensive  and integrated system of                                                                    
care  to provide  the necessary  services  and supports  for                                                                    
beneficiaries in their community of  choice and in the least                                                                    
restrictive setting  possible. The legislation  would create                                                                    
a  more equitable  distribution of  health professionals  in                                                                    
Alaska.  It  would  expand  options  for  behavioral  health                                                                    
treatment and  care, decrease the wait  times experienced by                                                                    
many  who  were  seeking  behavioral  health  services,  and                                                                    
prioritize  helping out  the  most vulnerable  beneficiaries                                                                    
across  the  state.  He  reiterated  that  the  Trust  fully                                                                    
supported SB 134.                                                                                                               
2:31:22 PM                                                                                                                    
SEVILLA LOVE,  INTEGRATION COORDINATOR, ALASKA  PRIMARY CARE                                                                    
ASSOCIATION,  ANCHORAGE  (via  teleconference),  had  direct                                                                    
insight  from  her  service in  the  healthcare  field.  She                                                                    
alluded to  the failing  attempt that Alaska  health centers                                                                    
were  currently  facing  because  they could  not  meet  the                                                                    
behavioral  health needs  of their  communities  due to  the                                                                    
limitations  barring them  from hiring  qualified behavioral                                                                    
health providers known  as licensed professional counselors.                                                                    
She noted  the bio, psycho,  social, and economic  impact of                                                                    
COVID-19  which would  only exponentiate  the  dire need  to                                                                    
prioritize the passage of SB 134.                                                                                               
Ms. Love continued that the  behavioral health issues on the                                                                    
system  came at  an  exorbitant cost  to  state and  federal                                                                    
funding. All  of the conditions  were preparing to  swamp an                                                                    
already  over-burdened  emergency  and  acute  response  and                                                                    
social service system in the wake of COVID-19.                                                                                  
Ms. Love  reported there were  LPCs available to go  to work                                                                    
presently, but  health centers  were not  able to  hire them                                                                    
due to not  being able to bill Medicaid.  She indicated that                                                                    
when patients  were sick,  they went  to their  primary care                                                                    
provider. She referred to an  article that reported up to 45                                                                    
percent  of people  who died  by suicide  had visited  their                                                                    
primary  care  provider  within  a  month  of  their  death.                                                                    
Additional  research  suggested that  up  to  67 percent  of                                                                    
individuals who  attempted suicide received medical  care as                                                                    
a  result of  their attempt.  She concluded  that given  the                                                                    
statistics  she  provided,  primary  care  had  an  enormous                                                                    
potential  to prevent  suicide and  connect people  with the                                                                    
needed healthcare they required.                                                                                                
Ms.  Love continued  that by  capturing  patients when  they                                                                    
presented to  primary care, providers  could help  them. She                                                                    
advocated removing  all barriers between driving  down costs                                                                    
while  meeting the  increasing behavioral  health issues  of                                                                    
individuals and families  on their way into  the system. She                                                                    
argued that  prevention was needed immediately  before state                                                                    
social youth and family  services and psychiatric admissions                                                                    
were necessary.  All of the  issues were  most appropriately                                                                    
prevented, met,  and treated in primary  healthcare centers.                                                                    
The licensed professional counselor  workforce was needed to                                                                    
reduce future financial burdens and to save lives.                                                                              
2:34:25 PM                                                                                                                    
PRENTICE   PEMBERTON,   COUNSELING  SOLUTIONS   OF   ALASKA,                                                                    
ANCHORAGE (via teleconference), spoke  in support of SB 134.                                                                    
He  provided  a brief  work  history.  He was  currently  in                                                                    
private practice  and owned Counseling Solutions  of Alaska.                                                                    
He had  23 therapists  who worked for  him in  Anchorage and                                                                    
Eagle River.  He was  calling on  behalf of  all of  them in                                                                    
support of the  bill. Changing the rule  that a psychiatrist                                                                    
had to  supervise LPCs and licensed  clinical social workers                                                                    
(LCSWs)  was  long  overdue.  He  responded  to  an  earlier                                                                    
question   about   qualifications.   Licensed   professional                                                                    
counselors need  the same qualifications to  provide therapy                                                                    
as  those  required  for LCSWs  and  licensed  marriage  and                                                                    
family  therapists (LMFTs).  The  qualifications included  a                                                                    
graduate  degree, 2  years  of  supervised work  experience,                                                                    
passing a  licensing exam,  and taking  continuing education                                                                    
credits. They  were as qualified  to provide therapy  as any                                                                    
other LPSCs, LPSWs, or LMFTs.                                                                                                   
Mr.  Pemberton  conveyed  that  the  preferred  approach  to                                                                    
treating  kids  and  teens  was  psychotherapy  first,  then                                                                    
referral  for  evaluation  by  a  psychiatrist.  He  thought                                                                    
things were currently done in  reverse order. He argued that                                                                    
supporting  families   and  kids  in  their   community  and                                                                    
allowing  problem  solving  was  the way  to  avoid  further                                                                    
hospitalizations  and the  use  of  valuable emergency  room                                                                    
resources. He suggested that Medicaid  kids were some of the                                                                    
most vulnerable  citizens Alaska  had, yet they  were denied                                                                    
reasonable access to much needed  mental health services for                                                                    
them and their families.                                                                                                        
Mr. Pemberton  continued that as  a community  mental health                                                                    
provider  and  medical social  worker,  one  of his  largest                                                                    
frustrations was  not being able to  find quality outpatient                                                                    
services.  As  a  provider  in   private  practice,  he  was                                                                    
contacted frequently  by doctors, pediatricians,  and family                                                                    
doctors looking for providers who  would take their Medicaid                                                                    
clients,  as  they  could  not get  them  in  anywhere.  The                                                                    
emergency room was their last  hope. Families were desperate                                                                    
to help  their kids  in crisis. He  surmised that  the state                                                                    
would pay  for the  care of  todays  children.  The question                                                                    
was would  the investment occur  in the near term  by paying                                                                    
for their  health and  wellness, or would  it be  in several                                                                    
years   by   paying   for  their   institutionalization   or                                                                    
incarceration.  He  thought much  of  the  backlog could  be                                                                    
2:38:29 PM                                                                                                                    
Co-Chair Johnston CLOSED Public Testimony.                                                                                      
Co-Chair Johnston  asked someone to walk  through the fiscal                                                                    
2:39:09 PM                                                                                                                    
GENNIFER  MOREAU-JOHNSON, DIRECTOR,  DIVISION OF  BEHAVIORAL                                                                    
HEALTH,  DEPARTMENT  OF  HEALTH  AND  SOCIAL  SERVICES  (via                                                                    
teleconference),  spoke in  support  of the  bill. The  bill                                                                    
could   expand  access   to  care   for  eligible   Alaskans                                                                    
statewide. She also noted the  potential for expanded access                                                                    
for care  in rural communities for  individuals experiencing                                                                    
mild to moderate disturbances. There  was also the potential                                                                    
decrease  overtime  of  psychiatric emergency  services  and                                                                    
acute care services.  Licensed professional counselors would                                                                    
also be  able to provide screening,  grief intervention, and                                                                    
referral  to  treatment  which  was a  key  element  of  the                                                                    
continuum of care.                                                                                                              
Co-Chair Johnston interrupted  Ms. Moreau-Johnson. She asked                                                                    
if  she could  walk  through the  fiscal  note. Ms.  Moreau-                                                                    
Johnson deferred to Melissa Hill.                                                                                               
MELISSA  HILL, ADMINISTRATIVE  OPERATIONS MANAGER,  DIVISION                                                                    
OF  HEALTH CARE  SERVICES, DEPARTMENT  OF HEALTH  AND SOCIAL                                                                    
SERVICES  (via  teleconference),  reviewed the  fiscal  note                                                                    
[OMB  Component  3234]. The  fiscal  note  showed a  $55,900                                                                    
services request  to complete modifications to  the Medicaid                                                                    
Management Information  System (MMIS)  that would add  a new                                                                    
provider type and adjust associated business rules.                                                                             
Co-Chair  Johnston set  the bill  aside. She  confirmed that                                                                    
the  amendments  for another  bill  had  been sent  out  via                                                                    
SB  134  was  HEARD  and   HELD  in  committee  for  further                                                                    
2:42:55 PM                                                                                                                    
AT EASE                                                                                                                         
2:56:38 PM                                                                                                                    
CS FOR SENATE BILL NO. 172(L&C)                                                                                               
     "An  Act extending  the termination  date of  the State                                                                    
     Medical Board; requiring a report  on the State Medical                                                                    
     Board's   audit  compliance;   and  providing   for  an                                                                    
     effective date."                                                                                                           
2:56:47 PM                                                                                                                    
ELIZABETH REXFORD, STAFF, SENATOR DONNY OLSON, introduced                                                                       
herself and read the sponsor statement:                                                                                         
     SB 172  will extend the  termination date of  the State                                                                    
     Medical Board (board).                                                                                                     
     The  State  Medical  Board   has  served  the  public's                                                                    
     interest    by   effectively    licensing   physicians,                                                                    
     osteopaths,  podiatrists,   physician  assistants,  and                                                                    
     paramedics.  The board  monitored licensees  and worked                                                                    
     to ensure that only  qualified individuals practiced in                                                                    
     Alaska.  Furthermore,  the   board  has  developed  and                                                                    
     adopted  certain  regulatory  changes  to  protect  the                                                                    
     public, improve the licensing  process, and improve the                                                                    
     delivery of services.                                                                                                      
     The  most recent  audit completed  by  the Division  of                                                                    
     Legislative Audit has proposed  a termination date that                                                                    
     is  three  years  less   than  the  eight-year  maximum                                                                    
     allowed  per statute.  The  Senate  Labor and  Commerce                                                                    
     committee  recently  amended  the bill  to  reduce  the                                                                    
     termination  date  by an  additional  two  years for  a                                                                    
     sunset  date  of  June   30,  2023.  Additionally,  the                                                                    
     committee  also  required  that the  legislative  audit                                                                    
     division submit  a report concerning compliance  of the                                                                    
     recommendations  from the  audit to  the medical  board                                                                    
     within one  year after the effective  date. The reduced                                                                    
     extensions and  one-year report requirement are  due to                                                                    
     the  audit's finding  that board  had failed  to follow                                                                    
     through  on  a few  set  priorities.  First, the  board                                                                    
     failed to  consistently report  license actions  to the                                                                    
     Federation  of  State  Medical  Boards.  Secondly,  the                                                                    
     board  has   failed  to  adopt   regulations  governing                                                                    
     registration in  the controlled  substance prescription                                                                    
     database.  These   regulations  require   licensees  to                                                                    
     register  in   a  controlled   substances  prescription                                                                    
     database.   Thirdly,   the   board  did   not   monitor                                                                    
     compliance with the  database registration requirement.                                                                    
     The   board  is   tasked  with   adequately  monitoring                                                                    
     licensees  to  ensure  that those  with  a  DEA  number                                                                    
     register  with  the controlled  substance  prescription                                                                    
     We respectfully  request that  the termination  date of                                                                    
     the board be extended to  align with the Senate Labor &                                                                    
     Commerce committee's  recommendation of June  30, 2023,                                                                    
     as  well   as  requiring   the  one-year   report  from                                                                    
     legislative audit. These  changes are incorporated into                                                                    
     the current version.                                                                                                       
Co-Chair Johnston thanked the sponsor and his staff for the                                                                     
bill and invited Kris Curtis to the table.                                                                                      
2:59:52 PM                                                                                                                    
KRIS  CURTIS,   LEGISLATIVE  AUDITOR,  ALASKA   DIVISION  OF                                                                    
LEGISLATIVE AUDIT,  conducted an audit of  the State Medical                                                                    
Board. She  indicated a copy  of the report was  in members                                                                     
packets. She reviewed the state audit:                                                                                          
     The  audit  concluded  the board  served  the  public's                                                                    
     interest    by   effectively    licensing   physicians,                                                                    
     osteopaths,  podiatrists,   physician  assistants,  and                                                                    
     paramedics.  The board  monitored licensees  and worked                                                                    
     to  ensure  only  qualified  individuals  practiced  in                                                                    
     Alaska.  Furthermore, the  board developed  and adopted                                                                    
     certain  regulatory  changes  to  protect  the  public,                                                                    
     improve   the  licensing   process,  and   improve  the                                                                    
     delivery of services.                                                                                                      
     The audit  also concluded the  board did not  serve the                                                                    
     public  interest  by   inconsistently  reporting  board                                                                    
     license  actions to  the  Federation  of State  Medical                                                                    
     Boards  (FSMB). In  addition, the  board did  not adopt                                                                    
     regulations  to  require   licensees  register  in  the                                                                    
     controlled substance prescription  database and did not                                                                    
     adequately  monitor licensees  to ensure  those with  a                                                                    
     DEA  number registered  with  the controlled  substance                                                                    
     prescription database.                                                                                                     
Ms. Curtis indicated the audit recommended the Legislature                                                                      
extend the board for 5 years.                                                                                                   
Ms. Curtis referred to the background section of the audit                                                                      
on page 5. She read from the report:                                                                                            
     Senate   Bill  74,   effective   July  2017,   required                                                                    
     occupational board licensees  that prescribe controlled                                                                    
     substances  to register  with the  controlled substance                                                                    
     prescription  database  maintained   by  the  Board  of                                                                    
     Pharmacy. The  database is  intended to  reduce misuse,                                                                    
     abuse,   and   diversion  of   controlled   substances.                                                                    
     Practitioners are required to  check the database prior                                                                    
     to    dispensing,    prescribing,   or    administering                                                                    
     medications, with certain exclusions.                                                                                      
Ms.  Curtis turned  to page  11 which  showed a  schedule of                                                                    
licensing  activity. The  board  issued just  over 1600  new                                                                    
licenses from FY  16 through January 2019. As of  the end of                                                                    
January  2019   there  were  5073  active   licensees  which                                                                    
represented  a  9  percent increase  compared  to  the  2012                                                                    
sunset audit.                                                                                                                   
Ms. Curtis pointed to page  14 which displayed a schedule of                                                                    
revenues  and  expenditures.  She   indicated  there  was  a                                                                    
deficit  in  2018  of  over $800,000.  In  response  to  the                                                                    
deficit they increased fees. The  schedule of fees was shown                                                                    
on page 15.                                                                                                                     
Ms.   Curtis    reported   that   the   auditors    made   3                                                                    
recommendations for improvement beginning  on page 18 of the                                                                    
audit. She read from the report:                                                                                                
     Recommendation   No.   1:   The  board   should   adopt                                                                    
     regulations to  guide the process for  registering with                                                                    
     the controlled substance prescription database.                                                                            
     The  board   did  not  adopt  regulations   to  require                                                                    
     licensees with a  Drug Enforcement Administration (DEA)                                                                    
     number   register   with   the   controlled   substance                                                                    
     prescription  database.  Senate  Bill  74,  Section  60                                                                    
     included uncodified  law that directed all  boards that                                                                    
     licensed  occupations  with prescription  authority  to                                                                    
     adopt regulations to implement the law.                                                                                    
     Rather than adopt  regulatory guidance for registering,                                                                    
     the  board   expanded  the  regulatory   definition  of                                                                    
     unprofessional  conduct to  include  licensees that  do                                                                    
     not  register. The  board also  implemented regulations                                                                    
     that  require   review  of  the   controlled  substance                                                                    
     prescription   database   prior   to   prescribing   or                                                                    
     dispensing and  added an  opioid maximum  daily dosage.                                                                    
     Board  members  did  not  consider  the  importance  of                                                                    
     establishing regulations  to guide  in the  process and                                                                    
     believed  the regulatory  changes that  were made  were                                                                    
     sufficient  to  satisfy   the  requirements  of  Senate                                                                    
     Bill 74.                                                                                                                   
     The database was intended to  reduce misuse, abuse, and                                                                    
     diversion  of   controlled  substances.  The   lack  of                                                                    
     regulations    regarding   registration    requirements                                                                    
     increases  the risk  that licensees  will not  register                                                                    
     which,  in turn,  limits the  database's effectiveness.                                                                    
     As described  in Recommendation No. 2,  the audit found                                                                    
     a high  degree of  noncompliance with  the registration                                                                    
     We recommend  the board adopt regulations  to guide the                                                                    
     process for  registering with the  controlled substance                                                                    
     prescription database.                                                                                                     
     Recommendation 2:  The board should  develop procedures                                                                    
     ensure  licensees with  a DEA  number  register in  the                                                                    
     controlled substance prescription database.                                                                                
     Per AS 08.64.101(a)(7), effective  July 2017, the board                                                                    
     require a  licensee who has  a DEA  registration number                                                                    
     to register with  the controlled substance prescription                                                                    
     database. The audit reviewed 25  new licenses (of which                                                                    
     19 had a DEA number)  and 15 renewal licenses (of which                                                                    
     13 had a DEA number).                                                                                                      
     Auditors  noted  that  the  application  form  for  new                                                                    
     licenses did not require  an applicant provide evidence                                                                    
     of   registration   with   the   controlled   substance                                                                    
     prescription  database.  Division staff  processed  the                                                                    
     applications  and the  board approved  the applications                                                                    
     without  regard  for  whether   or  not  the  applicant                                                                    
     registered  with  the  database. Auditors  checked  the                                                                    
     database  and found  that five  of the  19 new  license                                                                    
     applicants  with  a DEA  number  (26  percent) had  not                                                                    
     registered    four  applicants were  not listed  in the                                                                    
     database  and one  was listed  in the  database with  a                                                                    
     status of  "pending." Auditors  noted that  the renewal                                                                    
     application  was revised  in November  2018 to  request                                                                    
     applicants for  renewal licenses list  their controlled                                                                    
     substance  prescription  database registration  number.                                                                    
     However, applicants were permitted  to list a status of                                                                    
     "pending,"  and division  staff did  not verify  that a                                                                    
     licensee  obtained a  registration  number  at a  later                                                                    
     date.  Four of  the 13  renewal applicants  with a  DEA                                                                    
     number (31 percent) had a status of "pending."                                                                             
     The   board   and   DCBPL   failed   to   comply   with                                                                    
     AS 08.64.101(a)(7) due to a lack  of procedures and the                                                                    
     board's  decision to  allow  licensees  a grace  period                                                                    
     before enforcing the new requirements.  The law did not                                                                    
     provide for  a grace period  and had an  effective date                                                                    
     of  July 2017.  The  controlled substance  prescription                                                                    
     database  was intended  to  reduce  misuse, abuse,  and                                                                    
     diversion of controlled substances.                                                                                        
     Incomplete information  within the database  limits its                                                                    
     effectiveness,   which   increases    the   risk   that                                                                    
     controlled substances may be abused or diverted.                                                                           
     We  recommend the  board develop  procedures to  ensure                                                                    
     licensees  with   a  DEA   number  register   with  the                                                                    
     controlled substance prescription database.                                                                                
     Recommendation  3: The  board  chair  should work  with                                                                    
     director  to  establish  and  implement  procedures  to                                                                    
     ensure  board  disciplinary  actions  are  reported  in                                                                    
     accordance with state law.                                                                                                 
     Of  the 140  board disciplinary  actions issued  by the                                                                    
     State Medical Board between FY  16 and January 2019, 44                                                                    
     (31 percent) were not reported  to the FSMB as required                                                                    
     by AS 08.64.335.                                                                                                           
     Alaska Statute 08.64.335 states:                                                                                           
          The board shall promptly  report to the Federation                                                                    
          of  State  Medical  Boards for  inclusion  in  the                                                                    
          nationwide  disciplinary  data  bank  license  and                                                                    
          permit refusals under  AS 08.64.240, actions taken                                                                    
          by the  board under AS 08.64.331,  and license and                                                                    
          permit   suspensions   or  surrenders   under   AS                                                                    
          08.64.332 or 08.64.334.                                                                                               
     The 44  disciplinary actions not reported  to FSMB were                                                                    
     actions  taken   by  the  board  under   AS  08.64.331.                                                                    
     According to DCBPL  management, staff misunderstood the                                                                    
     types of actions to be reported.                                                                                           
     Additionally,  the  board   and  DCBPL  lacked  written                                                                    
     procedures  to   ensure  the  actions   were  correctly                                                                    
     reported  in a  timely manner.  The national  data bank                                                                    
     maintained by FSMB is designed  to restrict the ability                                                                    
     of incompetent  physicians to move from  state to state                                                                    
     without  disclosure  or   discovery  of  a  physician's                                                                    
     damaging or incompetent performance. DCBPL's failure                                                                       
     to report disciplinary actions increases the risk to                                                                       
     public safety.                                                                                                             
     We  recommend   the  board  chair  work   with  DCBPL's                                                                    
     director  to  establish  and  implement  procedures  to                                                                    
     ensure  board  disciplinary  actions  are  reported  in                                                                    
     accordance with state law.                                                                                                 
Ms. Curtis directed attention to  the responses to the audit                                                                    
beginning on page 31. The  commissioner of DCCED stated that                                                                    
corrective action had  already been taken to  make sure that                                                                    
disciplinary actions were reported  in compliance with state                                                                    
Ms. Curtis continued to page  33 of the audit containing the                                                                    
response   from   the   board    chair.   In   response   to                                                                    
recommendation  1  to  adopt  regulations  the  board  chair                                                                    
reiterated  her belief  that the  statutes clearly  required                                                                    
licensees   to  register   with  the   controlled  substance                                                                    
prescription database.  In her  opinion, regulation  did not                                                                    
seem necessary.  She also stated  that the  regulations that                                                                    
were  created were  reviewed by  the Department  of Law  and                                                                    
were found to be sufficient.  However, the chair stated that                                                                    
the board would  consult the Department of Law  and take any                                                                    
corrective actions that they deemed necessary.                                                                                  
Ms. Curtis  continued that in  response to  recommendation 2                                                                    
to  develop procedures,  the chair  stated that  a procedure                                                                    
had been  created to  ensure that  their licensees  would be                                                                    
registering with the database.                                                                                                  
Ms.  Curtis reported  that in  response to  recommendation 3                                                                    
the  chair   agreed  to   implement  procedures   to  ensure                                                                    
disciplinary actions were reported  in accordance with state                                                                    
3:05:45 PM                                                                                                                    
Representative LeBon  asked Ms.  Curtis if  she had  a sense                                                                    
that   the  State   Medical  Board   was  investigating   as                                                                    
appropriate. He  queried about issues that  might be falling                                                                    
through the  cracks and not  actually reaching  the decision                                                                    
level. Ms. Curtis commented. "Theres   always things that we                                                                    
dont   know."  The audit  always  focused  on efficiency  to                                                                    
which investigations  were happening.  The auditors  did not                                                                    
look  at actual  investigations  and  evaluate whether  they                                                                    
made  a  right  decision.  She could  not  properly  address                                                                    
Representative LeBons question.                                                                                                 
Representative Knopp  asked if the board  was fully staffed.                                                                    
Ms. Curtis  relayed that the  entire board had  changed over                                                                    
within the previous few months.                                                                                                 
Representative Knopp asked Ms.  Curtis to tell the committee                                                                    
about  the make-up  of  the  board. He  asked  if the  board                                                                    
consisted  of members  of the  public or  whether they  were                                                                    
medical  professionals. He  asked the  question because  Ms.                                                                    
Curtis  had  mentioned  regulations. Ms.  Curtis  referenced                                                                    
page  1  of the  audit  which  went  into detail  about  the                                                                    
organization  and  function  of  the board.  The  board  was                                                                    
comprised  of  8  members     5  physicians,  1  physicians                                                                     
assistant,  and 2  public members  with no  direct financial                                                                    
interest.  The  Division   of  Corporations,  Business,  and                                                                    
professional  Licensing provided  support for  the board  in                                                                    
terms  of  drafting  regulations.   The  Department  of  Law                                                                    
reviewed the regulations.                                                                                                       
Representative Knopp  asked where  the board fell  short. He                                                                    
wondered  if  it  was turnover  in  membership.  Ms.  Curtis                                                                    
thought they  had a  valid argument in  that they  felt like                                                                    
the statutes  were clear. The statute  stated that licensees                                                                    
had  to   register.  In  the  boards    opinion,  additional                                                                    
regulations  were not  needed.  The auditors  felt that  the                                                                    
non-compliance  was  so  high,  that  it  warranted  putting                                                                    
regulations into place.                                                                                                         
3:08:39 PM                                                                                                                    
SENATOR  DONNY   OLSON,  SPONSOR,   wanted  to   respond  to                                                                    
Representative  Knopps   question.  He  indicated  that  the                                                                    
board had  changed out completely  over the  previous couple                                                                    
of months. The  issue he had with the new  board members was                                                                    
that they were either from  Anchorage or Fairbanks with only                                                                    
one   person   from   Sitka.  He   thought   there   was   a                                                                    
maldistribution  of  board  members.   He  agreed  with  the                                                                    
auditors recommendation of having tighter constraints.                                                                          
Co-Chair Johnston  relayed that Dr. Richard  Wein was online                                                                    
and available for questions.                                                                                                    
Senator   Olson  indicated   he  had   been  on   the  board                                                                    
previously. He  expressed concerns  that a chairman  had not                                                                    
been named.  He thought  the circumstance  was similar  to a                                                                    
ship without a captain at the helm.                                                                                             
Representative  Knopp noted  Senator Olsons   comments about                                                                    
proper geographic  representation. He wondered if  the board                                                                    
would be  better served with  members that were  more evenly                                                                    
distributed  throughout the  state.  He asked  if there  was                                                                    
something the  legislature could  do to help.  Senator Olson                                                                    
responded  that  there  was  a  statute  which  stated  that                                                                    
members should  be from  as many  geographical areas  of the                                                                    
state   as  possible.   However,   the   statute  could   be                                                                    
interpreted  loosely, giving  the  governor  the ability  to                                                                    
choose whomever  he wanted. He  mentioned equipment  and lab                                                                    
tests. He deferred to Ms.  Curtis to answer the remainder of                                                                    
Representative   Knopps    question.    Ms.   Curtis   asked                                                                    
Representative Knopp to restate his question.                                                                                   
Representative  Knopp  thought  an  executive  director  was                                                                    
needed  for the  board, as  it did  not appear  that certain                                                                    
things were being done. Ms.  Curtis responded that the board                                                                    
had an  executive director. She  reported that  the position                                                                    
had been occupied  by someone for a long time  but had left.                                                                    
A  new person  had  recently taken  the  position. She  also                                                                    
noted  that the  auditors were  conducting an  audit on  the                                                                    
Direct  Entry  Midwives  whose board  had  turned  over  100                                                                    
percent. In the prior year,  the Board of Nursing had turned                                                                    
over 100 percent as well.  She commented that there appeared                                                                    
to be a pattern.                                                                                                                
3:12:55 PM                                                                                                                    
Representative Josephson indicated his  office had a bill to                                                                    
improve the PDMP [Prescription  Drug Monitoring Program]. He                                                                    
thought  Ms. Curtis  had testified  that the  board did  not                                                                    
think regulations  were needed,  as the statutes  were clear                                                                    
enough  in  terms DEA  prescribers  having  to register.  He                                                                    
asked if  he had heard  her correctly. Ms.  Curtis responded                                                                    
Representative  Josephson asked  about the  26 percent  that                                                                    
did  not register.  He noted  there  were several  providers                                                                    
that  did  not  prescribe  opiates and  would  not  need  to                                                                    
register.  There were  other  providers  that did  prescribe                                                                    
opiates but had not registered.  He asked if he was correct.                                                                    
Ms.  Curtis responded  that the  percentage  applied to  the                                                                    
number  of providers  that should  have  registered. He  was                                                                    
correct that not all providers  had to register. However, 26                                                                    
percent of providers who had  a DEA number and were required                                                                    
to register, did not do so.                                                                                                     
Representative Josephson  suggested it meant  that providers                                                                    
who  had not  registered could  not get  into the  system to                                                                    
look someone up, even if they  wanted to. He asked if he was                                                                    
correct. Ms. Curtis responded, "Yes."                                                                                           
3:14:27 PM                                                                                                                    
Representative Wool  asked that  if someone  registered with                                                                    
the  PDMP, they  would  not necessarily  check the  database                                                                    
before  writing  a  prescription.  Essentially,  they  could                                                                    
write 10  prescriptions to 10  different people,  never look                                                                    
them  up, and  no  one  would know.  Ms.  Curtis was  unsure                                                                    
whether  there  was  an  audit  trail  function  within  the                                                                    
database  to monitor  inquiries. There  certainly could  be.                                                                    
There was no one responsible for monitoring the system.                                                                         
Representative  Wool thought  there was  a requirement  that                                                                    
physicians  also enter  prescription information  that would                                                                    
be accessible  to pharmacies.  However, it  was not  part of                                                                    
the law.  Only pharmacists  had to  check the  database. Ms.                                                                    
Curtis  indicated  it applied  to  all  individuals who  had                                                                    
prescribing  authority.  They  were supposed  to  check  the                                                                    
database    before   they    administered   or    prescribed                                                                    
medications. It was both.                                                                                                       
Representative  Wool explained  that  as  he understood  it,                                                                    
providers  only  had  to  check  the  database  to  see  the                                                                    
patients   history at  the pharmacy.  The  provider did  not                                                                    
have to  enter the  prescription they were  prescribing. Ms.                                                                    
Curtis   reported  that   there  was   a  requirement   that                                                                    
prescriptions were  uploaded into the database  at some time                                                                    
in the  process. The audit took  a deeper look at  the issue                                                                    
when it  conducted a pharmacy  audit. The Board  of Pharmacy                                                                    
extension date was limited to 3  years. In the next Board of                                                                    
Pharmacy audit, the auditors would  be looking at compliance                                                                    
across all occupations.                                                                                                         
Representative   Josephson   mentioned   HB  242.   He   was                                                                    
astonished that  the board did  not notify  prescribers that                                                                    
they  were not  in compliance  with  the law.  It could  put                                                                    
pressure on the board to revoke a providers license.                                                                            
Co-Chair  Johnston   noted  Ms.  Chambers  was   online  and                                                                    
available for questions.                                                                                                        
Ms.  Curtis mentioned  that the  auditors found  it slightly                                                                    
egregious that the board granted  a grace period, as the law                                                                    
did  not  provide for  a  grace  period. The  Board  Chairs                                                                     
response was that it was  not the boards  intention to grant                                                                    
a grace  period for complying  with the law. The  board only                                                                    
intended  to grant  a grace  period for  enforcing the  law.                                                                    
From the auditors perspective there was not a difference.                                                                       
Representative Carpenter wondered if  the board members were                                                                    
the same members  through the previous 2  audits. Ms. Curtis                                                                    
did  not know  what percentage  of  the board  was in  place                                                                    
previously. The  prior audit was  in 2012. The  auditors had                                                                    
consistently found  problems with reporting. In  the chairs                                                                     
response she  did not think  the auditors  characterized the                                                                    
finding  correctly. She  stated that  the prior  finding was                                                                    
not  exactly the  same as  the current  funding. Ms.  Curtis                                                                    
agreed that  the findings were slightly  different, however,                                                                    
the recommendation  was the  same. The  auditors recommended                                                                    
that they  start reporting correctly in  compliance with the                                                                    
law  which  they  had  not   been  doing  consistently.  She                                                                    
highlighted  that  they  were   not  reporting  the  portion                                                                    
related to civil fines.                                                                                                         
3:19:18 PM                                                                                                                    
Co-Chair Johnston OPENED Public Testimony.                                                                                      
3:19:47 PM                                                                                                                    
CHARLES MCKEE,  SELF, ANCHORAGE (via teleconference),  was a                                                                    
beneficiary  of  the  McKee  Trust and  had  had  access  to                                                                    
medical  facilities  as recently  as  October.  He spoke  in                                                                    
support of the  extension of the medical  board. He recalled                                                                    
the  governors  veto  of Medicaid  funds. He  referred to  a                                                                    
lawsuit  in which  a medical  establishment  of doctors  and                                                                    
nurses  sued  the  current   administration.  The  case  was                                                                    
settled out  of court  due to  an artificial  emergency that                                                                    
was  created by  the current  administration related  to the                                                                    
veto of  Medicaid   which  he needed to access.  He reminded                                                                    
members  the state  was currently  in emergency  status but,                                                                    
the  artificial  emergency  was manifested  by  the  current                                                                    
administration which  mandated that everyone sign  a loyalty                                                                    
Co-Chair Johnston  interjected that the testifier  needed to                                                                    
stay on the topic of the bill.                                                                                                  
Mr.  McKee indicated  the State  Medical  Board should  have                                                                    
refused compliance like the staff  at the Alaska Psychiatric                                                                    
Institute (API)  who resigned in protest.  He reiterated his                                                                    
approval of the extension.                                                                                                      
3:21:46 PM                                                                                                                    
Co-Chair Johnston CLOSED public testimony.                                                                                      
CSSB 172(L&C)  was HEARD and  HELD in committee  for further                                                                    
3:21:59 PM                                                                                                                    
AT EASE                                                                                                                         
3:22:53 PM                                                                                                                    
CS FOR SENATE BILL NO. 55(2d JUD)                                                                                             
     "An Act relating to judges of the court of appeals;                                                                        
     and providing for an effective date."                                                                                      
3:23:03 PM                                                                                                                    
Co-Chair Johnston invited Senator  Wilson's staff to provide                                                                    
a brief introduction of the bill.                                                                                               
JASMIN  MARTIN, STAFF,  SENATOR WILSON,  indicated that  the                                                                    
senator was on  other state business but would  likely be at                                                                    
the  hearing  shortly. She  explained  that  SB 55  added  a                                                                    
fourth  permanent  judge  to   the  Court  of  Appeals.  Any                                                                    
criminal  trial   that  ended  in  a   conviction  could  be                                                                    
appealed. Since 2014, there had  been a significant increase                                                                    
in  the instances  of criminal  trials. The  court needed  a                                                                    
fourth judge  to catch up on  the large backlog and  to keep                                                                    
pace with the current and  expected cases in the future. The                                                                    
bill was fully  supported by the Alaska  Court System. Nancy                                                                    
Mead was in the room  to answer specific questions about the                                                                    
Ms. Martin continued  that the focus of  the legislation was                                                                    
to  strengthen  the  continuum  of  public  safety.  It  was                                                                    
essential  to  equip  the  courts   to  handle  the  growing                                                                    
workload. The issue was highlighted  by the Chief Justice in                                                                    
his recent  address to the legislature.  The current average                                                                    
time  between  a  criminal  appeal  being  filed  and  being                                                                    
decided was  about 3 years.  She asserted that  the timeline                                                                    
was  unacceptable to  victims,  the  public, attorneys,  and                                                                    
Ms. Martin asserted  that the court would be  much faster at                                                                    
resolving  the  cases  that  were   pending  and  ready  for                                                                    
decision  if there  was an  additional  appellate judge.  In                                                                    
2013,  the  total  number  of cases  ready  for  review  and                                                                    
assigned to  a judge was  approximately 50. In  other words,                                                                    
judges  could  keep  pace  if  they  were  issued  about  50                                                                    
decisions per  year. However,  in 2018,  the number  of case                                                                    
assignments rose to about 90  decisions per year. The judges                                                                    
could  not  keep  pace  with  the  increase  in  cases.  The                                                                    
legislation would improve the  function of Alaskas  criminal                                                                    
justice system.                                                                                                                 
Ms. Martin indicated that the  legislatures  recent focus on                                                                    
crime legislation  had increased  the expected case  load of                                                                    
the Court  of Appeals. In 2018  and 2019 there was  a record                                                                    
high number of  felony cases filed at the  trial courts. All                                                                    
of the  facts she had  laid out had  proven the need  for an                                                                    
additional judge.  She asked members  to support SB  55. She                                                                    
offered to review  the sectional analysis at  the request of                                                                    
the committee.                                                                                                                  
Co-Chair Johnston thanked Senator  Wilson for coming back to                                                                    
the hearing. She invited Nancy  Mead to the table to present                                                                    
invited testimony and provide a review of the fiscal note.                                                                      
3:26:06 PM                                                                                                                    
NANCY   MEADE,  GENERAL   COUNSEL,   ALASKA  COURT   SYSTEM,                                                                    
explained that the  Court of Appeals was  an appellate court                                                                    
that only handled criminal cases.  After a persons  Superior                                                                    
Court  Trial, an  appeal went  to the  Supreme Court  in the                                                                    
instance of a civil case and  to the Court of Appeals in the                                                                    
instance  of a  criminal case.  Since the  inception of  the                                                                    
Court of Appeals in 1980 it  had always had 3 judges and had                                                                    
been unable to keep pace with  the number of filings and the                                                                    
amount  of  work  since  2011. She  expected  the  trend  to                                                                    
continue.   Currently,  the   Court  of   Appeals  was   not                                                                    
publishing, disposing,  or finishing as many  cases as there                                                                    
were cases coming in the door.                                                                                                  
Ms.  Mead reported  that the  Alaska Court  System had  been                                                                    
dealing with  the problem with  several approaches  over the                                                                    
last few years.  It had been trying to find  funding to have                                                                    
temporary judges handle a portion  of the cases. Some of the                                                                    
cases were  being handled in  a quicker manner  with shorter                                                                    
decisions.  Presently,  it  was the  Alaska  Court  Systems                                                                     
priority  to find  a lasting  fix  to the  problem which  it                                                                    
expected to  continue due  to changes  in criminal  laws and                                                                    
with all of the other  increased number of felony trials and                                                                    
felony  filings  over the  previous  few  years. The  Alaska                                                                    
Court  System  fully  supported the  bill.  It  was  usually                                                                    
neutral on bills but, the  Supreme Court needed the issue to                                                                    
be  addressed.   She  could  provide  more   detail  if  the                                                                    
committee desired or could answer any questions.                                                                                
Representative  Sullivan-Leonard asked  Ms. Mead  to explain                                                                    
the 4  full-time positions  listed in  the fiscal  note. Ms.                                                                    
Mead responded  that a judge  in any appellate court  in the                                                                    
country  needed  some  support  staff  in  order  to  do  an                                                                    
effective job.  A judge on  the Court  of Appeals had  2 law                                                                    
clerks. Law  clerks were typically,  but not  always, recent                                                                    
graduates  of law  school. They  served for  1 year.  It was                                                                    
standardized around  the country  with all  different judges                                                                    
and  all  different courts  that  most  law clerk  positions                                                                    
lasted 1 to  2 years. A judge  came with 2 law  clerks and a                                                                    
judicial assistant.  A judicial assistant kept  track of all                                                                    
the  files, answered  phones, and  handled  the front  desk.                                                                    
They also typically kept things  on schedule and handled the                                                                    
computer  system as  well as  other miscellaneous  items. In                                                                    
order to  be an  effective judge,  they needed  an effective                                                                    
Representative  Wool asked  about  the uptick  in 2018.  Ms.                                                                    
Mead  relayed that  felony filings  typically fluctuated  up                                                                    
and down through  the years. She reported  a severe downtick                                                                    
in the  number of filings  and the number of  trials between                                                                    
2016  and 2018.  The court  systems  data  did not  tell the                                                                    
story of why  things happened. She had heard  that with some                                                                    
of the  monumental changes in  the criminal law  made during                                                                    
the time  period there were  fewer arrests and  fewer felony                                                                    
filings. She  suggested that perhaps  it was related  to the                                                                    
resources  of  the Department  of  Law  being able  to  file                                                                    
certain things.  Also, there were  changes to the  drug laws                                                                    
that  meant  that  certain  drug  felonies  were  no  longer                                                                    
felonies    they significantly  dropped. In  FY 18  the laws                                                                    
reverted  back, and  there were  an  additional 1000  felony                                                                    
filings  than the  previous year.  She  reported that  there                                                                    
were about 7200 filings in  2018, versus about 6200 in 2017.                                                                    
In FY 19  the number increased again from 7200  to 7350. The                                                                    
Alaska  Court  System  expected   the  number  of  cases  to                                                                    
continue to  rise as  more prosecutors  were hired  and more                                                                    
law enforcement was on the street.                                                                                              
3:30:58 PM                                                                                                                    
Representative Wool  wondered if HB  49 had been  taken into                                                                    
account  or whether  the effects  of  HB 49  would start  to                                                                    
appear.  He wondered  if Ms.  Mead expected  another quantum                                                                    
leap.  Ms.  Mead  replied  that   the  Alaska  Court  System                                                                    
expected at  lease a steady  increase from  HB 49, if  not a                                                                    
more  substantial one.  In  HB 49  the  Department of  Laws                                                                     
fiscal   note  included   the  funding   for  6   additional                                                                    
prosecutors.  She reported  that  with  more prosecutors  in                                                                    
place, there  would be more enforcement  or consequences for                                                                    
criminal  offenses  leading  to  more  work  for  the  court                                                                    
Vice-Chair  Ortiz  asked Ms.  Mead  if  adding an  Appellate                                                                    
Court  judge would  really solve  the  backlog problem.  Ms.                                                                    
Mead responded  that the bill  would solve the  courts  part                                                                    
of the problem. She clarified  that there were delays at the                                                                    
trial  court level  which SB  55 did  not address.  The bill                                                                    
applied to  the Court  of Appeals.  She reiterated  that the                                                                    
average time  for an appeal to  be filed and resolved  was 3                                                                    
years.  No one  thought  the timeframe  was acceptable.  The                                                                    
part of the  problem the court was responsible  for would be                                                                    
solved by  having a  fourth judge on  the Court  of Appeals.                                                                    
Other reasons  for delay were  largely because  the agencies                                                                    
also had  difficulty getting all  the resources  garnered to                                                                    
get  cases briefed  in  time. They  were  building up  their                                                                    
resources  as well.  She  reiterated that  the  part of  the                                                                    
problem that was  attributable to the court  taking too long                                                                    
to put  its decisions together  would be solved by  having a                                                                    
fourth judge on the Court of Appeals.                                                                                           
Representative  Knopp  wondered  about  the  nature  of  the                                                                    
appeals  the court  was hearing.  He  asked whether  certain                                                                    
rules should be  tightened. Ms. Mead responded  that all the                                                                    
cases  were criminal  in nature.  The  cases were  basically                                                                    
equally split between merit appeals  (where a defendant felt                                                                    
something was  handled improperly at the  trial court level)                                                                    
and  sentence appeals  (where a  defendant felt  they should                                                                    
have received  less time).  The reversal  rate was  low, and                                                                    
defendants  did  almost all  of  the  appealing. There  were                                                                    
limited circumstances  in which the prosecutor  could appeal                                                                    
such as double jeopardy.  She continued that when defendants                                                                    
appealed, they  won only about  10 percent to 12  percent of                                                                    
the time.  When a defendant  received a reversal  it usually                                                                    
meant that the case was remanded  and sent back to the court                                                                    
to correct an  error. The person was not  typically set free                                                                    
or declared innocent  by the Court of  Appeals. She provided                                                                    
an example.                                                                                                                     
Representative  Knopp   asked  if  there  was   anyone  that                                                                    
reviewed  the merits  of the  appeal before  it went  to the                                                                    
trial  court for  appeal. He  wondered  if it  automatically                                                                    
went to the Court of Appeals.                                                                                                   
Ms. Mead responded  that a defendant had a right  to file an                                                                    
appeal. Most defendants in  Alaskas  system were represented                                                                    
by  a public  defender who  helped them  put together  their                                                                    
appeal. The  public defender acted  somewhat as a  filter to                                                                    
put together the  best arguments. It would be  unusual for a                                                                    
public defender  to refuse to  file an appeal for  a client.                                                                    
The  public  defender filtered  the  appeal  to make  it  as                                                                    
strong  as possible  streamlining things  and ensuring  that                                                                    
the arguments had merit rather than being frivolous.                                                                            
Representative Josephson asked  if there was a  system for a                                                                    
motion for bail pending an  appeal. Along with 3 years being                                                                    
broadly  unacceptable,   there  were  victims   that  wanted                                                                    
finality  and  defendants  who  might or  might  not  be  in                                                                    
custody pending appeal.  He asked how time would  be made up                                                                    
for someone  who was  wrongfully held  in custody.  Ms. Mead                                                                    
answered that  people could be  out on bail  pending appeal.                                                                    
If it happened,  it was often because the person  was out on                                                                    
bail on their  own recognizance or in  the community pending                                                                    
their trial. If they did  not violate their bail conditions,                                                                    
went  through their  trial, and  were convicted,  they could                                                                    
request to remain  out on their own  recognizance during the                                                                    
pendency of  their appeal.  It was not  common for  a person                                                                    
who was incarcerated to have  their case completely reversed                                                                    
100 percent  such that they  were found innocent.  An appeal                                                                    
was  sent back  about 10  percent of  the time  for a  trial                                                                    
court judge to correct an error.                                                                                                
3:38:05 PM                                                                                                                    
Co-Chair Johnston OPENED Public Testimony.                                                                                      
Co-Chair Johnston CLOSED Public Testimony.                                                                                      
Co-Chair Johnston would be setting the bill aside.                                                                              
SB 55 was HEARD and HELD in committee for further                                                                               
Co-Chair Johnston would be recessing Monday morning's                                                                           
meeting scheduled for 9:00 a.m. to a call of the chair.                                                                         
3:39:14 PM                                                                                                                    
The meeting was adjourned at 3:39 p.m.                                                                                          

Document Name Date/Time Subjects
SB 115 ver. E Amendments 1-4 3.22.2020.pdf HFIN 3/22/2020 11:00:00 AM
SB 115
SB 155 - Explanation of Changes 2 24 2020 Version G_ (003).pdf HFIN 3/22/2020 11:00:00 AM
SB 155
SB 155 - Sponsor Statement - 2 24 2020 Version G.pdf HFIN 3/22/2020 11:00:00 AM
SB 155
SB155 - PowerPoint Presentation - 2 24 2020 Version G.pdf HFIN 3/22/2020 11:00:00 AM
SB 155
SB155 - Sectional - 3 19 2020 Version G.pdf HFIN 3/22/2020 11:00:00 AM
SB 155
SB 155 Letter of Support - Alaska Chamber 03.11.20.pdf HFIN 3/22/2020 11:00:00 AM
SB 155
SB 155 Letter of Support - Fairbanks Chamber of Commerce 3.2.20.pdf HFIN 3/22/2020 11:00:00 AM
SB 155
SB 155 Letter of Support - The Alliance 3.11.20.pdf HFIN 3/22/2020 11:00:00 AM
SB 155
SB 155 Letter of Support - First Things First Alaska Foundation 2.28.20.pdf HFIN 3/22/2020 11:00:00 AM
SB 155
SB 55 - Explaination of Changes U to S 2.24.2020.pdf HFIN 3/22/2020 11:00:00 AM
SB 55
SB 55 - Sectional Summary v S 3.10.2020.pdf HFIN 3/22/2020 11:00:00 AM
SB 55
SB 55 - Sponsor Statement v S 3.10.2020.pdf HFIN 3/22/2020 11:00:00 AM
SB 55
SB 134 - LPCs to Medicaid Optional Services - House Finance Committee - 3.22.20.pdf HFIN 3/22/2020 11:00:00 AM
SB 134
SB 134 Alaska ER Report_2016 032120.pdf HFIN 3/22/2020 11:00:00 AM
SB 134
SB 134 Alaska ER Report_2017 032120.pdf HFIN 3/22/2020 11:00:00 AM
SB 134
SB 134 Alaska ER Report_2018 032120.pdf HFIN 3/22/2020 11:00:00 AM
SB 134
SB 134 Alaska ER Report_2019 032120.pdf HFIN 3/22/2020 11:00:00 AM
SB 134
SB 134 MatSu Health Foundation 032020.pdf HFIN 3/22/2020 11:00:00 AM
SB 134
SB 134 Sponsor Statement v. A 032120.pdf HFIN 3/22/2020 11:00:00 AM
SB 134
SB 134 Support Letter - Board of Professional Counselors (3.20.2020).pdf HFIN 3/22/2020 11:00:00 AM
SB 134
SB134 Sectional Analysis v.A 032120.pdf HFIN 3/22/2020 11:00:00 AM
SB 134
SB 172 Explanation of Changes v. A to M 3.4.2020.pdf HFIN 3/22/2020 11:00:00 AM
SB 172
SB 172 Sponsor Statement 3.11.2020.pdf HFIN 3/22/2020 11:00:00 AM
SB 172
SB 172 Supporting Document - Audit of DCCED State Medical Board w responses 04.16.2020.pdf HFIN 3/22/2020 11:00:00 AM
SFIN 3/11/2020 9:00:00 AM
SB 172
SB 134 - Mat-Su Health Foundation HUMS Summary.pdf HFIN 3/22/2020 11:00:00 AM
SB 134
SB 115 ver. E Amendments 1-4 3.22.2020.pdf HFIN 3/22/2020 11:00:00 AM
SB 115
SB 155 Public Testimony Rec'd by 032120.pdf HFIN 3/22/2020 11:00:00 AM
SB 155