Legislature(2005 - 2006)SENATE FINANCE 532

05/02/2006 09:00 AM Senate FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved SCS CSHB 318(FIN) Out of Committee
Moved SCS CSHB 380(RES) Out of Committee
Heard & Held
Heard & Held
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    SENATE FINANCE COMMITTEE                                                                                  
                          May 2, 2006                                                                                         
                           9:12 a.m.                                                                                          
CALL TO ORDER                                                                                                               
Co-Chair  Lyda  Green  convened   the  meeting  at  approximately                                                               
9:12:07 AM.                                                                                                                   
Senator Lyda Green, Co-Chair                                                                                                    
Senator Gary Wilken, Co-Chair                                                                                                   
Senator Con Bunde, Vice Chair                                                                                                   
Senator Fred Dyson                                                                                                              
Senator Lyman Hoffman                                                                                                           
Senator Bert Stedman                                                                                                            
Senator Donny Olson                                                                                                             
Also  Attending: CRAIG  JOHNSON,  Staff  to Representative  Lesil                                                             
McGuire;  PETER  PUTZIER,   Senior  Assistant  Attorney  General,                                                               
Transportation  Section,  Department   of  Law;  RUTH  BLACKWELL,                                                               
Realtor  and  Representative,  Alaska  Association  of  Realtors;                                                               
PEGGY  ANN  MCCONNOCHIE,  Representative, Alaska  Association  of                                                               
Realtors;  KEVIN RITCHIE,  Executive  Director, Alaska  Municipal                                                               
League; MICHAEL  PAWLOWSKI, Staff to Representative  Kevin Meyer;                                                               
KRISTEN  RYAN,   Director,  Division  of   Environmental  Health,                                                               
Department  of  Environmental  Conservation; BILL  HOGAN,  Deputy                                                               
Commissioner,  Department of  Health and  Social Services;  JANET                                                               
CLARK, Assistant  Commissioner, Finance and  Management Services,                                                               
Department  of Health  and Social  Services;  JEFF JESSEE,  Chief                                                               
Executive  Officer, Alaska  Mental  Health  Trust Authority;  DR.                                                               
KATHINKA WHITE,  Alaska Primary Care Association;  RYNNIEVA MOSS,                                                               
Staff  to  Representative  John Coghill;  EDDY  JEANS,  Director,                                                               
School Finance, Department of Education and Early Development                                                                   
Attending  via  Teleconference:  From  Fairbanks:  LUKE  HOPKINS,                                                             
Assembly  Member, Fairbanks  North Star  Borough; From  an offnet                                                               
locations:   BOB  GERLACK,   State   Veterinarian,  Division   of                                                               
Environmental Health,  Department of  Environmental Conservation;                                                               
Dr.  BRAD  WHISTLER, Dentist,  Department  of  Health and  Social                                                               
Services;  From Anchorage:  DR.  LOUISA  CASTRODALE, Division  of                                                               
Public Health, Department of Health and Social Services                                                                         
SUMMARY INFORMATION                                                                                                         
HB 318-LIMITATION ON EMINENT DOMAIN                                                                                             
The Committee  heard from the  bill's sponsor, the  Department of                                                               
Law,  and  took  public  testimony. A  committee  substitute  was                                                               
adopted and the bill reported from Committee.                                                                                   
HB 380-ANIMALS & ANIMAL OR AGRICULTURAL PRODUCTS                                                                                
The  Committee   heard  from  the   bill's  sponsor,   the  State                                                               
Veterinarian,  the Department  of Environmental  Conservation and                                                               
the Department of  Health and Social Services.  The bill reported                                                               
from Committee.                                                                                                                 
HB 105-MEDICAID FOR ADULT DENTAL SERVICES                                                                                       
The Committee  heard from the  bill's sponsor, the  Department of                                                               
Health  and  Social  Services, the  Alaska  Mental  Health  Trust                                                               
Authority,  Alaska  Primary  Care Association,  and  took  public                                                               
testimony. The bill was held in Committee.                                                                                      
HB 16-SCHOOL FUNDS RELATED TO BOARDING SCHOOLS                                                                                  
The Committee  heard from the  bill's sponsor and  the Department                                                               
of Education  and Early Development.  A committee  substitute was                                                               
adopted.  Two amendments  were considered,  but failed  adoption.                                                               
The bill was held in Committee.                                                                                                 
HB 218-PRIVATE HATCHERY COST RECOVERY FISHERIES                                                                                 
This bill was scheduled but not heard.                                                                                          
     SENATE CS FOR CS FOR HOUSE BILL NO. 318(JUD)                                                                               
     "An Act limiting the exercise of eminent domain."                                                                          
9:12:47 AM                                                                                                                    
This was  the first hearing for  this bill in the  Senate Finance                                                               
Senator  Bunde moved  to adopt  committee substitute  Version 24-                                                               
LS1083\R as the working document.                                                                                               
Co-Chair Green objected for explanation.                                                                                        
Co-Chair  Green explained  that,  at the  request  of the  bill's                                                               
sponsor, Representative  Lesil McGuire, Version "R"  would delete                                                               
language adopted by the Senate  Judiciary Committee. The language                                                               
eliminated is located in Sec. 5,  page 6 beginning on line 25 and                                                               
continuing  through  page 7,  line  11  of  SCS CS  HB  318(JUD),                                                               
Version 24-LS1083\P, as follows.                                                                                                
     …However, a  municipality may exercise the  power of eminent                                                               
     domain  to acquire  private property  from a  private person                                                               
     for the  purpose of  transferring title  to the  property to                                                               
     another private person for economic development if                                                                         
          (1) the municipality does not delegate the power of                                                                   
     eminent domain to another person;                                                                                          
          (2) before issuing the notice in (3) of this                                                                          
     subsection, the  municipality makes  a good faith  effort to                                                               
     negotiate the purchase of the property;                                                                                    
          (3) written notice is provided at least 90 days before                                                                
     the  public  hearing to  each  owner  of  land that  may  be                                                               
     affected by the exercise of eminent domain;                                                                                
          (4) the municipality holds a public hearing on the                                                                    
    exercise of eminent domain after adequate public notice;                                                                    
          (5) the governing body of the municipality approves                                                                   
     the  exercise of  eminent domain  by  a two-thirds  majority                                                               
     vote; and                                                                                                                  
          (6) in the case of a second class city, the governing                                                                 
     body  of  the  city  adopts an  ordinance  by  a  two-thirds                                                               
     majority vote, the ordinance is  submitted to the voters for                                                               
     approval  at  the next  general  election  or at  a  special                                                               
     election  called  for  that purpose,  and  the  exercise  of                                                               
     eminent domain  is approved  by a majority  of the  votes on                                                               
     the question.                                                                                                              
Co-Chair  Green supported  the elimination  of this  language, as                                                               
its inclusion would negate the  purpose of the bill. The adoption                                                               
of Version "R" would return the bill to its original form.                                                                      
9:14:03 AM                                                                                                                    
CRAIG JOHNSON, Staff to Representative  Lesil McGuire, the bill's                                                               
sponsor, informed the  Committee that this bill  was developed in                                                               
response to a  recent United States (U.S.)  Supreme Court ruling,                                                               
Kelo v. City  of New London, Connecticut, eminent  domain case in                                                             
which private property was condemned  and "transferred to another                                                               
private  entity for  private  economic  development". The  public                                                               
outcry to that Court's ruling  spurred eminent domain legislation                                                               
in 42  states. Representative McGuire  researched Alaska  Law and                                                               
found that existing law "would  allow this type of condemnation".                                                               
Therefore this bill,  which has been scrutinized by  a variety of                                                               
entities including  the Department of Law,  environmental groups,                                                               
the Alaska  Railroad Corporation, utility and  oil companies, and                                                               
realtors, was developed to address the issue.                                                                                   
Mr.  Johnson stated  that one  of the  policies paramount  in the                                                               
development of the bill was  "the appropriateness of transferring                                                               
private  property to  another  private individual",  specifically                                                               
the transfer  of people's  homes. Numerous  homes were  taken and                                                               
transferred  to  a private  developer  in  the Connecticut  case.                                                               
Thus, this bill contained language  that would protect a person's                                                               
primary residence. He clarified however,  that the bill would not                                                               
absolutely prohibit eminent  domain of a person's  home, as there                                                               
are  legitimate instances  for its  use.  "The determination  was                                                               
that the ability of one  person to recreate doesn't take priority                                                               
over  another person's  dwelling space."  This determination  was                                                               
further refined to protect approximately  a four-acre plot around                                                               
someone's home from eminent domain.                                                                                             
Mr.  Johnson stressed  that while  "this is  a bill  that no  one                                                               
loves",  90 percent  of  it  is acceptable.  It  is a  compromise                                                               
between the stances of such  entities as the American Association                                                               
of Realtors who believe that  "no private property should ever be                                                               
taken" as  opposed to the  position of environmental  groups that                                                               
support  widespread  use  of  eminent  domain.  This  bill  would                                                               
reserve  the  use of  eminent  domain  "in traditional  uses  but                                                               
strictly deals with those two  narrow policy issues of private to                                                               
private and protecting someone's home".                                                                                         
9:17:44 AM                                                                                                                    
Mr. Johnson professed this legislation,  which would not fiscally                                                               
impact  the   State,  was  thoroughly   reviewed,  both   in  its                                                               
development and during its 22  Legislative hearings. He urged the                                                               
Committee to support the bill.                                                                                                  
Co-Chair Green asked for confirmation  that the sponsor supported                                                               
the Version "R" committee substitute.                                                                                           
Mr. Johnson affirmed.                                                                                                           
Mr.  Johnson noted  that federal  legislation is  currently being                                                               
considered  that would  restrict  funding to  states that  "allow                                                               
private to  private transfers of any  political subdivisions". In                                                               
conclusion,  this  bill  would   reserve  eminent  domain  policy                                                               
decision  authority  to  the Legislature  rather  than  to  local                                                               
governing bodies.                                                                                                               
9:18:49 AM                                                                                                                    
LUKE  HOPKINS, Assembly  Member,  Fairbanks  North Star  Borough,                                                               
testified  via teleconference  from Fairbanks,  in opposition  to                                                               
Version  "R".  The  Borough  considers  eminent  domain  a  local                                                               
control  issue and  has established  a  process to  best fit  the                                                               
needs of  the community. The  Municipality of Anchorage  has also                                                               
adopted an eminent domain policy.                                                                                               
9:19:57 AM                                                                                                                    
Mr.  Hopkins addressed  Mr. Johnson's  comments that  Version "R"                                                               
"would strike  the best balance"  between the  various interests.                                                               
One  consideration omitted  however, was  a local  municipality's                                                               
right  to  take  action  on an  issue  involving  eminent  domain                                                               
specifically relating to economic  development concerns. He urged                                                               
the  Committee   to  consider  the  Senate   Judiciary  committee                                                               
substitute,  Version "P",  as it  is responsive  to the  needs of                                                               
local governments.                                                                                                              
9:21:23 AM                                                                                                                    
Senator  Stedman  asked  Mr.  Hopkins  whether  this  bill  might                                                               
"hinder"  a  municipality's ability  to  extend  sewer and  water                                                               
lines  or further  utility infrastructure.  Oftentimes, easements                                                               
are necessary to support these efforts.                                                                                         
9:22:14 AM                                                                                                                    
Mr. Hopkins understood  that the bill would  not restrict utility                                                               
and infrastructure easements.                                                                                                   
Co-Chair Green concurred.                                                                                                       
9:23:11 AM                                                                                                                    
Senator Stedman stated that, oftentimes,  in the effort to expand                                                               
a utility trunk  line, a utility must  negotiate easements across                                                               
private property. The question is  whether this legislation might                                                               
negatively  impact  municipality  or utility's  ability  in  that                                                               
Mr.  Johnson  assured  the  Committee  these  circumstances  were                                                               
"protected  in  the  bill".  Efforts were  taken  not  to  change                                                               
existing uses of  eminent domain. Language in  Sec. 2(a)(10) page                                                               
3, line 10 specifically allows  the continuance of eminent domain                                                               
for community  sewerage needs. Utility  infrastructure, railroad,                                                               
hospital,  highway needs  and other  public good  needs are  also                                                               
addressed in Sec. 2.                                                                                                            
Senator Stedman acknowledged.                                                                                                   
PETER PUTZIER, Senior  Assistant Attorney General, Transportation                                                               
Section,  Department   of  Law,  concurred  with   Mr.  Johnson's                                                               
9:24:50 AM                                                                                                                    
RUTH  BLACKWELL, Realtor  and Representative,  Alaska Association                                                               
of  Realtors,   shared  that  the   Association  is   99  percent                                                               
supportive of  Version "R". The  Association is  against changing                                                               
private property to public use,  as such action would negate that                                                               
land's  obligation to  contribute to  the community  tax base.  A                                                               
person's  private  property  should   only  transfer  to  another                                                               
private  entity through  the free  market enterprise  system. The                                                               
government   should  not   become  involved   in  that   process.                                                               
Currently, only  one percent of  the land in Alaska  is privately                                                               
owned; 99 percent of the land  is owned by the State, federal, or                                                               
lands  claim  entities.  That  amount  should  be  sufficient  to                                                               
provide  for a  municipality or  other public  land use  need for                                                               
economic gain.                                                                                                                  
9:26:38 AM                                                                                                                    
PEGGY  ANN  MACONNOCHIE,  Representative, Alaska  Association  of                                                               
Realtors, enthusiastically  spoke in  support of Version  "R", as                                                               
it would revert  the bill to its original intent.  "The Kelo case                                                             
was a clear  taking of private property …  for private purposes."                                                               
The Association  understood municipalities'  desire to  have more                                                               
local  control, but  that must  not come  at the  expense of  the                                                               
owners' property rights. Version  "R" would protect those private                                                               
property rights.                                                                                                                
9:28:13 AM                                                                                                                    
Ms.  McConnochie  assured the  Committee  that  "this is  a  very                                                               
important issue  to all  of us as  private property  owners", and                                                               
the Legislature's decision  on this bill would  be remembered for                                                               
decades. People's homes  should be sacred. A  person's ability to                                                               
own, use,  and transfer  property is "one  of our  basic rights".                                                               
Legislative protection of that right would be appreciated.                                                                      
9:28:46 AM                                                                                                                    
KEVIN RITCHIE, Executive Director,  Alaska Municipal League (AML)                                                               
informed the Committee  AML had "no position  on eminent domain".                                                               
However,  he  noted that  three  of  AML's largest  members  have                                                               
enacted  eminent domain  policies similar  to those  presented in                                                               
the  bill. The  only issue  of concern  to AML  is that  of local                                                               
Mr. Ritchie  agreed with Mr.  Hopkins that the policy  adopted in                                                               
the   Senate   Judiciary   committee  substitute,   Version   "P"                                                               
established  a  process  through  which  "the  Legislature  could                                                               
absolutely guarantee" that "a very  substantial and fair" eminent                                                               
domain public  hearing process  would occur  at the  local level.                                                               
Any decision made  at the local level would  require support from                                                               
the majority of the local governing body.                                                                                       
Mr.  Ritchie concurred  with the  Alaska Association  of Realtors                                                               
position that  this was  a very  important decision.  However, he                                                               
reemphasized AML's concern about  local control. He stressed that                                                               
one should  be mindful that  the Kelo case, which  generated this                                                             
legislation, occurred in Connecticut.  Alaska is not Connecticut.                                                               
None of  the 10,000  eminent domain  situations presented  in the                                                               
Kelo case pertained  to a situation that occurred  in Alaska. "We                                                             
have been good stewards of eminent domain."                                                                                     
9:30:41 AM                                                                                                                    
Co-Chair Green removed her objection to adopting Version "R".                                                                   
There being no further objection,  Version "R" was ADOPTED as the                                                               
working document.                                                                                                               
Senator Dyson  was "delighted  with both  the bill"  and Co-Chair                                                               
Green's support of it.                                                                                                          
Senator  Dyson  moved to  report  the  bill from  Committee  with                                                               
individual recommendations and accompanying fiscal notes.                                                                       
There being no  objection, SCS CS HB 318 (FIN)  was REPORTED from                                                               
Committee with  previous zero  fiscal note  #1 dated  January 11,                                                               
2006  from the  Department  of Commerce,  Community and  Economic                                                               
Development; previous zero fiscal note  #2 dated January 11, 2006                                                               
from  the  Department  of  Environmental  Conservation;  previous                                                               
indeterminate  fiscal  note  #3   dated  January  10,  2006  from                                                               
Department of  Law; previous indeterminate  fiscal note  #4 dated                                                               
January 11,  2006 from the  Department of Natural  Resources; and                                                               
previous  indeterminate fiscal  note  #5 dated  January 11,  2006                                                               
from the Department of Transportation and Public Facilities.                                                                    
9:31:58 AM                                                                                                                    
     SENATE CS FOR CS FOR HOUSE BILL NO. 380(RES)                                                                               
     "An  Act   relating  to  the   powers  and  duties   of  the                                                               
     commissioner   of   environmental   conservation   regarding                                                               
     animals,  animal products,  agricultural  products, and  the                                                               
     transportation of  animals and animal products;  relating to                                                               
     the  employment,   appointment,  and   duties  of   a  state                                                               
     veterinarian   by   the    commissioner   of   environmental                                                               
     conservation; relating to the  powers of the commissioner of                                                               
     natural resources regarding  agricultural products; relating                                                               
     to animal  rabies prevention and control;  and providing for                                                               
     an effective date."                                                                                                        
9:32:11 AM                                                                                                                    
This was  the first hearing for  this bill in the  Senate Finance                                                               
MICHAEL  PAWLOWSKI,  Staff  to Representative  Kevin  Meyer,  the                                                               
bill's sponsor, communicated that  many "working groups" met over                                                               
the Legislative interim to develop  this bill, which would revise                                                               
State   Statutes  pertaining   to  "the   powers  of   the  State                                                               
Veterinarian and our animals and animal product Statutes".                                                                      
Mr. Pawlowski  informed the  Committee that  the majority  of the                                                               
State's animal Statutes  were established prior to  1949 when the                                                               
majority of "animals were considered  livestock". Over time, "the                                                               
definition of  what an animal  or animal product is"  has changed                                                               
and State Statutes must evolve  to reflect current circumstances.                                                               
In addition,  such things as  Avian influenza and  other zoonotic                                                               
diseases must be considered.                                                                                                    
Mr.  Pawlowski proclaimed  that the  authorities provided  to the                                                               
Department  of Environmental  Conservation  by existing  Statutes                                                               
were deemed "inadequate  and the definitions were  unclear". As a                                                               
result, "the State was not in  a position to react accordingly in                                                               
the event of  a crisis". This bill "would repeal  and reenact the                                                               
majority of the  provisions of Title 3 as they  relate to animals                                                               
and animal products and the power of our State Veterinarian".                                                                   
Mr. Pawlowski contended  the changes made to the  bill during its                                                               
committee  hearing  process produced  a  good  product. The  bill                                                               
would  have no  fiscal impact.  This bill  "is one  piece of  the                                                               
puzzle" through which to address  the threat to humans from Avian                                                               
influenza   and  other   zoonotic   diseases,   which  could   be                                                               
transmitted by exposure to domestic animals.                                                                                    
9:33:50 AM                                                                                                                    
Co-Chair Green  asked for further  information about  issues that                                                               
were addressed during the bill's hearing process.                                                                               
9:34:05 AM                                                                                                                    
Mr. Pawlowski shared that the  State's agricultural community had                                                               
raised concerns. He  praised the efforts of  the Senate Resources                                                               
Committee, chaired by Senator Ralph  Seekins, in addressing those                                                               
concerns.  To  that  point, he  referenced  language  in  Section                                                               
1(b)(3)  and (4)  beginning  on  page 2  line  29 and  continuing                                                               
through  page 3,  line  2  of SCS  CS  HB  381(RES), Version  24-                                                               
LS1469\L.  This language  addressed the  procedure through  which                                                               
the  State  would  quarantine  or  destroy  an  animal.  Existing                                                               
"Statutes  are  completely  inadequate", as  they  would  provide                                                               
compensation  only for  dairy  cattle.  The compensation  levels,                                                               
ranging  from  $300 to  $500  per  animal  were also  limited  by                                                               
judicial district.  The value of  dairy cattle today  far exceeds                                                               
that value. Thus, the definition  of animal was expanded to align                                                               
with  the  federal  indemnity  payments   of  the  United  States                                                               
Department of Agriculture (USDA) program.                                                                                       
Mr. Pawlowski  stated that further consideration  was provided to                                                               
address  the  diversity  of  animals found  in  Alaska,  such  as                                                               
reindeer, which  might not  be included  for compensation  in the                                                               
federal indemnity  program. The compensation would  be subject to                                                               
appropriation. This  would "create  a vehicle" through  which the                                                               
Legislature  could,  in  an emergency,  provide  support  to  the                                                               
industry and a  community "to solve a problem  that really wasn't                                                               
of their making".                                                                                                               
Co-Chair Green  noted that  this would  address the  concern that                                                               
Committee members might have heard from constituents.                                                                           
In  response to  a  comment from  Co-Chair  Green, Mr.  Pawlowski                                                               
directed  attention to  another provision  in the  bill that  had                                                               
evoked concern:  the ability of  the DEC commissioner  to appoint                                                               
individuals  other than  the State's  Veterinarian to  enforce or                                                               
manage  provisions  in  Title  3. This  language  is  located  in                                                               
Section  1(b)(2),  page  2  lines  25-28.  The  Senate  Resources                                                               
committee substitute  addressed this concern by  incorporating on                                                               
lines  26 and  27 of  that subsection,  the requirement  that the                                                               
appointed individuals must  act under the direction  of the State                                                               
Mr. Pawlowski stated that were  there an Avian influenza outbreak                                                               
or  a foot  and  mouth outbreak  in a  reindeer  herd, the  State                                                               
Veterinarian must  possess the authority  to work  with municipal                                                               
officials  and local  veterinarians, and  act as  the responsible                                                               
party  in  overseeing  any  action  being  taken,  including  the                                                               
actions of an appointed individual.                                                                                             
9:36:51 AM                                                                                                                    
BOB   GERLACK,   State   Veterinarian,  Office   of   the   State                                                               
Veterinarian,  Division of  Environmental  Health, Department  of                                                               
Environmental Conservation, testified  via teleconference from an                                                               
offnet  site.  Current  State  Statutes  would  allow  the  State                                                               
Veterinarian  to   control  the  spread  of   contagious  disease                                                               
provided  it originated  with  livestock,  commercial poultry  or                                                               
animals of  fur farms. This  bill would expand this  authority to                                                               
help protect both domestic and  wildlife animal resources as well                                                               
as public health in the State.                                                                                                  
Mr. Gerlack stated  that this bill would  complement HB 95-PUBLIC                                                               
HEALTH  DISASTERS/EMERGENCIES,  which  was enacted  in  the  year                                                               
2005. That bill  allowed "public health officials  to control the                                                               
spread of contagious and potentially deadly diseases in people".                                                                
Mr. Gerlack  informed that  the regulations  in place  to control                                                               
infectious diseases  in animals  were reviewed  in the  past. The                                                               
determination was  that they created  "an artificial  system", as                                                               
they treated diseases in livestock,  wildlife, pets and people as                                                               
separate  issues.  "The  fact is  that  infectious  diseases  are                                                               
rarely restricted to an individual  group or species of animals."                                                               
They  could  not  be  "contained   by  artificial  or  geographic                                                               
boundary"  and "could  spread very  rapidly".  The emergence  and                                                               
rapid spread of  new diseases in this century  has presented "new                                                               
challenges for the  management and control of  animals and public                                                               
health  diseases". More  than "70  percent  of recent  infections                                                               
affecting people are zoonotic diseases",  which are diseases that                                                               
originate in animals but could  inflect people. Zoonotic diseases                                                               
could, on  a large scale,  negatively impact animal  health, food                                                               
supplies,  human health  and local  and national  economies. This                                                               
should be a concern to all people and industry.                                                                                 
Mr. Gerlack proclaimed that diseases  could spread into Alaska by                                                               
the  importation of  animals or  animal products  such as  dairy,                                                               
meats, animal feed, or domestic  or wild animal movement. Animals                                                               
could  easily transverse  the border  between Alaska  and Canada.                                                               
Migrating waterfowl  could introduce Avian influenza  or the West                                                               
Nile  virus  into  the  State. The  State  Veterinarian  must  be                                                               
provided the  authority and  tools to  protect people  and animal                                                               
resources  in the  State.  The current  authority  is limited  in                                                               
regards  to infectious  disease  control. In  addition, no  State                                                               
agency has  the authority to  manage all groups or  categories of                                                               
animals  including  domestic  livestock,  pets,  exotic  or  wild                                                               
animals. This  authority is urgently  needed in order  to control                                                               
threats to the State's animal resources or public health.                                                                       
9:40:58 AM                                                                                                                    
DR. LOUISA  CASTRODALE, Division of Public  Health, Department of                                                               
Health  and Social  Services, testified  via teleconference  from                                                               
Anchorage on  behalf of  Dr. Richard  Mandsager, Director  of the                                                               
Division.  The  Division,  which  works closely  with  the  State                                                               
Veterinarian's office on disease  investigations that affect both                                                               
animal and  human health, fully  supports this bill, as  it would                                                               
strengthen the collaborative effort.                                                                                            
9:41:40 AM                                                                                                                    
CHRISTIAN  RYAN,  Director,  Division  of  Environmental  Health,                                                               
Department  of  Environmental   Conservation,  was  available  to                                                               
respond to questions.                                                                                                           
Co-Chair  Green  asked   which  change  to  the   bill  was  most                                                               
significant in achieving support for it.                                                                                        
Ms. Ryan responded  that, during the bill's evolution,  "a lot of                                                               
changes  were  made   to  make  people  more   accepting  of  the                                                               
legislation". Broadening  the definition  of which  animals could                                                               
be quarantined  by the  State from livestock  to all  animals had                                                               
tremendous impact;  however, many  people were supportive  of the                                                               
bill due to  fear of the Avian flu and  other diseases that might                                                               
occur. The  addition of  the indemnity  clause through  which the                                                               
State  could reimburse  people for  animals that  might be  taken                                                               
also  satisfied  many  concerns.  The addition  of  the  language                                                               
specifying that no action could  be taken without the approval of                                                               
the  State  Veterinarian was  also  an  important element.  These                                                               
conditions appear to satisfy the concerns.                                                                                      
Co-Chair Green noted  the Alaska Department of Fish  and Game had                                                               
provided  a pamphlet  [copy on  file]  titled "A  Field Guide  To                                                               
Common Wildlife Diseases and Parasites in Alaska".                                                                              
9:43:13 AM                                                                                                                    
Senator  Bunde  moved to  report  the  bill from  Committee  with                                                               
individual recommendations and accompanying fiscal notes.                                                                       
There being  no objection, SCS  CS HB 380(RES) was  REPORTED from                                                               
Committee with  previous zero  fiscal note  #1 dated  February 6,                                                               
2006 from the Department of Environmental Conservation.                                                                         
AT EASE 9:44:14 AM / 9:46:12 AM                                                                                             
     CS FOR HOUSE BILL NO. 105(FIN)                                                                                             
     "An Act relating to coverage for adult dental services                                                                     
     under Medicaid; and providing for an effective date."                                                                      
9:46:25 AM                                                                                                                    
This was  the first hearing for  this bill in the  Senate Finance                                                               
BILL HOGAN, Deputy Commissioner,  Department of Health and Social                                                               
Services, informed  the Committee  this legislation  would change                                                               
Medicaid  coverage to  allow adult  recipients to  receive up  to                                                               
$1,150  annually  in  preventive   and  restorative  dental  care                                                               
services  such as  cleaning, exams,  tooth  restoration and  both                                                               
upper and lower dentures. Adult  dental care is currently limited                                                               
to  emergency care  for the  immediate  relief of  pain or  acute                                                               
infection. The  most common  outcome of the  current care  is the                                                               
extraction of  teeth. This Medicaid expansion  would benefit "the                                                               
most  needy  Alaskans:  those  with  disabilities  and  seniors".                                                               
Approximately  16,000 of  the adults  currently  enrolled in  the                                                               
State's Medicaid program could benefit from this proposal.                                                                      
Mr. Hogan  noted this was one  of the first Medicaid  programs to                                                               
specify a  maximum limit. In  addition, the bill would  include a                                                               
three-year termination date. "This  will allow the Department and                                                               
the Legislature  to evaluate the  effectiveness of  the program,"                                                               
to include participation  levels "and the true cost  and value of                                                               
the   program".  The   Department   is   actively  working   with                                                               
stakeholders,  particularly   the  Alaska  Mental   Health  Trust                                                               
Authority (AMHTA), "who consider  this a significant issue within                                                               
communities  throughout Alaska".  AMHTA would  provide the  State                                                               
match required by Medicaid for this program.                                                                                    
Mr.  Hogan stated  that between  $700,000 and  $800,000 of  AMHTA                                                               
mini-grant program  funds are spent annually  on providing dental                                                               
care to  AMHTA beneficiaries, particularly those  with behavioral                                                               
health issues  and developmental disabilities. Those  funds could                                                               
be better utilized for other  beneficiary needs were this program                                                               
Mr. Hogan  shared that the Division  of Vocational Rehabilitation                                                               
in  the Department  of Labor  and Workforce  Development annually                                                               
expends  $100,000 to  help individuals  in their  program "obtain                                                               
dental  care  to  increase  the likelihood  that  they  could  be                                                               
9:49:53 AM                                                                                                                    
JANET  CLARK,  Assistant  Commissioner,  Finance  and  Management                                                               
Services, Department  of Health  and Social Services  stated that                                                               
the  Department's assumptions  in the  original fiscal  note were                                                               
extensively reviewed  during the bill's hearing  before the House                                                               
Finance Committee.  As a  result, the  fiscal note  that reported                                                               
from House Finance was considerably  less than the initial fiscal                                                               
note.  Many  of  the  assumptions  were  changed,  including  the                                                               
decision  to  reduce  the  number of  recipients  served  by  the                                                               
program  in its  initial two  years  due to  access and  start-up                                                               
issues. The original  assumption that the program  would serve 35                                                               
percent of  eligible adults is  reflected in the  program's third                                                               
year of operation.                                                                                                              
Ms.  Clarke   continued  that,  in  addition,   the  Department's                                                               
emergency  dental care  expenses were  reduced for  year two  and                                                               
three of the  program, based on the assumption  that the Medicaid                                                               
preventive  care service  would  reduce the  demand on  emergency                                                               
dental care service.                                                                                                            
Ms. Clarke stated that the  Department's original fiscal note was                                                               
developed with the understanding  that Federal Medical Assistance                                                               
Percentage  (FMAP)  funding  would  be  reduced  from  57  to  50                                                               
percent; however  that reduction  had not  transpired. Therefore,                                                               
the fiscal note was revised  to reflect the current 57.58 percent                                                               
FMAP level.  Another "key" fiscal element  was AMHTA's commitment                                                               
to provide  their FY 07, FY  08 and FY 09  dental services budget                                                               
to the program.  Thus, as reflected in Fiscal Note  #2, dated May                                                               
4, 2006, AMHTA would contribute  $425,000 in FY07, and $1,425,000                                                               
each  for FY  08  and FY  09.  The  FY 07  fiscal  note was  also                                                               
reduced, as the  program would not be anticipated  to begin until                                                               
late in the fiscal year.                                                                                                        
Ms.  Clarke noted  that  the  State's FY  08  general fund  match                                                               
obligation would be $1,300,000. This,  with the assistance of the                                                               
AMHTA  funding, would  leverage  approximately  $10.3 million  in                                                               
services. The fiscal  note also reflected the  termination of the                                                               
program in FY  09. Efforts to refine the fiscal  note assisted in                                                               
reducing the program's impact on the State's general fund.                                                                      
Senator  Dyson inquired  to the  income and  asset levels  a non-                                                               
AMHTA recipient,  "non-disabled, non-elderly adult" must  have to                                                               
qualify for the program.                                                                                                        
Ms. Clark  responded that  a 21  through 64-year-old  person, who                                                               
was  not in  one the  aforementioned categories  and who  did not                                                               
have children, would not typically qualify for Medicaid.                                                                        
Senator Dyson acknowledged.                                                                                                     
9:54:04 AM                                                                                                                    
Co-Chair  Wilken asked  regarding  the  Department's efforts  "to                                                               
work  with the  Alaska Dental  Association to  get them  to allow                                                               
temporary  dental  licenses  for   those  dentists  from  outside                                                               
Alaska" who wish to provide  basic dental services in rural areas                                                               
of the State during the summer.                                                                                                 
Mr.  Hogan  deferred  to  the   Department's  Dentist,  Dr.  Brad                                                               
9:54:46 AM                                                                                                                    
DR.  BRAD  WHISTLER, Dentist,  Department  of  Health and  Social                                                               
Services,  testified  via  teleconference from  an  offnet  site.                                                               
Community  health   centers  and  tribal  dental   programs  have                                                               
discussed this issue  with the Alaska Dental Board.  The Board is                                                               
considering issuing  courtesy licenses, which are  different than                                                               
temporary licenses. The Department  deferred to the community and                                                               
tribal  dental programs  to further  this issue  with the  Alaska                                                               
Dental Board.                                                                                                                   
Co-Chair Wilken identified  his interest to be  with the issuance                                                               
of temporary licenses rather  than courtesy licenses. Continuing,                                                               
he asked  the status  of Board action  regarding the  issuance of                                                               
temporary  licenses  "to  people  that  want  to  come  and  help                                                               
Mr. Whistler had  not been personally involved in  the actions of                                                               
the Dental  Board. However,  he understood  that "the  only issue                                                               
that is being  addressed by the Dental Board at  this time is the                                                               
courtesy license issue".                                                                                                        
Co-Chair Wilken asked whether Dr.  Whistler planned on asking the                                                               
Dental Board to consider "granting  temporary licenses that could                                                               
take care of some of our  more indigent people by what amounts to                                                               
Mr. Whistler,  speaking on  behalf of  the Department,  stated he                                                               
would "be  happy to"  advance that subject.  He explained  that a                                                               
temporary  license  could be  issued  to  a dentist  desiring  to                                                               
practice  in Alaska,  provided  they held  a  license in  another                                                               
state.  This license  would  suffice until  the  time the  Dental                                                               
Board could  meet and "do  licensure by credentials".  A courtesy                                                               
license could  be issued  to a dentist  who planned  on providing                                                               
volunteer services, as a person  holding a courtesy license could                                                               
not charge a fee for their  service. A courtesy license would not                                                               
be  appropriate for  the needs  of a  community health  center or                                                               
tribal program, as their desire is to employ dentists.                                                                          
9:56:34 AM                                                                                                                    
Co-Chair  Wilken  asked Dr.  Whistler  to  provide his  office  a                                                               
letter detailing  the efforts being  taken by the  Department "to                                                               
enable  temporary  licenses"  in  the State.  The  letter  should                                                               
include  such things  as the  feasibility of  the licensure,  the                                                               
steps  that would  be required  to  further the  effort, and  the                                                               
benefits that would  be anticipated. He also requested  a copy of                                                               
any correspondence  between the  Department and the  Dental Board                                                               
relating to this issue.                                                                                                         
Co-Chair Green supported Co-Chair Wilken's request.                                                                             
Co-Chair  Wilken shared  his concern  about  the proposed  dental                                                               
program  by repeating  the  "old saying  that  those that  forget                                                               
history  are doomed  to  repeat it.  And here  we  go again."  He                                                               
recalled  discussions  that occurred  when  the  Denali Kid  Care                                                               
program was  proposed. While that  program "was presented  with a                                                               
firm  number  of  expenditure",  the cost  associated  with  that                                                               
program  "has  far exceeded"  what  had  been anticipated  for  a                                                               
variety  of  reasons.  The Power  Cost  Equalization  program  is                                                               
another  program  whose   expenses  dramatically  increased.  Its                                                               
expenses  increased from  eight  million dollars  a  year to  $80                                                               
million dollars in six years.                                                                                                   
Co-Chair Wilken  questioned the true  fiscal impact of  the bill,                                                               
as, while he  appreciated the inclusion of the  $1,150 per person                                                               
annual dental service limit, the  number of program recipients is                                                               
unknown. Therefore, to  gain his support, he  suggested an annual                                                               
maximum  expenditure  level be  specified  for  the program.  The                                                               
intent  would be  to terminate  the  program once  the limit  was                                                               
reached.  This  would  provide   the  Legislature  with  "a  hard                                                               
indication of just the demand" on the program.                                                                                  
Co-Chair  Wilken asked  that the  bill  be held  in Committee  to                                                               
further discuss how to incorporate such language.                                                                               
Co-Chair Green acknowledged.                                                                                                    
9:58:31 AM                                                                                                                    
Senator  Olson  asked  the Department's  and  the  Alaska  Dental                                                               
Board's  "views"  on  licensing dental  hygienists  who  received                                                               
training in countries other than the United States.                                                                             
Mr. Hogan deferred to Dr. Whistler.                                                                                             
9:58:46 AM                                                                                                                    
Dr. Whistler clarified  that the Department is  not involved with                                                               
the  Alaska  Dental  Board  and the  issuance  of  licenses.  The                                                               
Department, in  this process, has focused  on "Medicaid financing                                                               
and reimbursement  for those providers that  are practicing under                                                               
general  supervision   of  dental  staff".  The   Department  has                                                               
participated  in  "expanding  private   capacity"  and  has  been                                                               
supportive  of  the  program encouraging  "tribal  expansion  and                                                               
provision of  care to Indian  Health Service  (IHS) beneficiaries                                                               
in the State".                                                                                                                  
Senator Olson asked whether he  would be correct in communicating                                                               
to his constituents in the IHS  program that Dr. Whistler and the                                                               
Department were supportive of the program.                                                                                      
Dr.  Whistler  stated that  the  Department  has been  and  would                                                               
continue to  support IHS activities.  As a dental officer  of the                                                               
State, he  is aware that  this model  has been successful  in New                                                               
Zealand,  Australia,  Great  Britain  and  other  countries.  The                                                               
dental access issue is widespread  in the United States, and this                                                               
concept  and  others have  been  discussed.  The American  Dental                                                               
Hygiene  Association has  proposed  "an  expanded dental  hygiene                                                               
model   to  address   some  of   these  same   issues."  Numerous                                                               
discussions between private dentistry  and public health dentists                                                               
have  occurred on  the issue  of how  to meet  the needs  of "the                                                               
underserved". Personally, he believed  this program was worthy of                                                               
consideration   and  could   work.  It   has  been   successfully                                                               
implemented  in other  areas of  the  world. He  agreed that  the                                                               
program  should be  evaluated  to  ensure that  it  would be  "an                                                               
appropriate model for the State".                                                                                               
10:01:49 AM                                                                                                                   
ANDY POPE,  a senior citizen,  testified in Juneau in  support of                                                               
the bill. Senior citizens,  particularly low-income seniors, "are                                                               
probably  the only  class [of  citizens] in  this State  excluded                                                               
from the dental health care".  Native health corporations provide                                                               
dental  care  to  Natives  and employed  people  have  access  to                                                               
employer  insurance   plans.  Seniors  cannot   purchase  private                                                               
insurance,  and  if it  were  available,  the cost  would  exceed                                                               
senior's financial  capacity. "There are programs  for alcoholics                                                               
and narcotics, but  not low-income seniors." This  is "an overdue                                                               
benefit"  for seniors.  The bill  is "well  constructed" and  the                                                               
$1,150  per person  annual limit  would provide  "a safety  cap",                                                               
which, by requiring people to  participate for expenses above the                                                               
limit, would  curtail excessive  expenses. However,  people might                                                               
have  a  problem  finding  a  dentist "that  would  let  you  get                                                               
something done for a down  payment". He doubted the program would                                                               
escalate out  of control. "All  individuals would be  treated the                                                               
same".  The $1,150  per  person limit  "is  reasonable", and  the                                                               
termination date would control the  parameters of the program. He                                                               
urged the Committee to adopt this "long overdue" legislation.                                                                   
10:04:25 AM                                                                                                                   
DR.   KATHINKA  WHITE,   Representative,   Alaska  Primary   Care                                                               
Association, Inc., spoke in support  of the bill. The Association                                                               
"represents  24  health  care organizations  operating  115  non-                                                               
profit community  health centers and other  safety net providers"                                                               
that   offer  health   and  dental   care   to  "the   uninsured,                                                               
underinsured,   underserved  populations   in  the   State".  Her                                                               
testimony was as follows.                                                                                                       
     I  am speaking  to you  on  behalf of  Alaskans that  remain                                                               
     untreated  victims of  our  nation's  silent epidemic,  oral                                                               
     disease.   Dental  carries   and  periodontal   disease  are                                                               
     infectious diseases  caused by the transmission  of bacteria                                                               
     from the parent to child or  from partner to partner. In the                                                               
     year 2000, in  the publication "Oral Health  in America" the                                                               
     Surgeon General  released a  milestone report  that provided                                                               
     overwhelming evidence  of this epidemic. It  emphasized that                                                               
     the  mouth is  a point  of  entry for  infection, which  can                                                               
     spread to  other parts of  the body and pointed  to emerging                                                               
     associations  between  oral   diseases  and  other  physical                                                               
     ailments such  as diabetes, heart disease,  strokes, adverse                                                               
     pregnancy outcomes  including low  birth weight  babies. The                                                               
     report  makes  it clear  that  oral  health is  integral  to                                                               
     overall  health.  Oral  health   care  represents  the  most                                                               
     frequently  reported  unmet  health  need  among  low-income                                                               
     The inability  to access proper dental  health resources has                                                               
     had  devastating personal  consequences  for many  Alaskans,                                                               
     including  severe  oral  facial  pain,  infection,  impaired                                                               
     ability  to  eat,  poor  diet,  nutritional  status,  speech                                                               
     difficulties, lost  work days,  and unnecessary  tooth loss.                                                               
     Currently  dental services  for  adults are  limited to  the                                                               
     relief of  pain and  infection only.  These services  do not                                                               
     include  root canals  resulting  in the  extraction of  most                                                               
     teeth.  Many individuals  would  rather  live in  continuous                                                               
     pain  than have  their  teeth extracted  because the  social                                                               
     consequences  of oral  disfigurement diminishes  their self-                                                               
     image  and  sense of  self  worth.  Adults without  adequate                                                               
     dental care resources  express a feeling that  their lack of                                                               
     dental coverage  and resulting inability to  get appropriate                                                               
     dental care  reflects society's lack of  recognition of them                                                               
     as people with intrinsic value.                                                                                            
     The Surgeon  General's report  also noted  this relationship                                                               
     between oral  facial disfigurement  due to oral  disease and                                                               
     the  associated  social  stigma,  low  esteem,  and  anxiety                                                               
     experienced which in turn  limits their educational, career,                                                               
     and marriage opportunities. Among  adults seeking jobs those                                                               
     with visual  carries and missing teeth  were less employable                                                               
     than  those  with  healthy smiles,  resulting  in  increased                                                             
     numbers of  adults on state  funding ATAP  [Alaska Temporary                                                             
     Assistance Program], unemployment,  and food stamp programs.                                                               
     In closing, oral health means  much more than healthy teeth.                                                               
     Oral  health is  integral  to the  general  health and  well                                                               
     being  of all  Alaskans. Not  allowing dental  care benefits                                                               
     that include  prevention and  routine dental  care knowingly                                                               
     puts our most vulnerable citizens  at a greater health risk.                                                               
     Alaska  cannot afford  these long-term  financial and  human                                                               
     welfare  costs.  Alaska  Primary Care  Association  and  the                                                               
     Municipality  of Anchorage  support HB  105 and  believe its                                                               
     time for the  dental Medicaid program to  be restructured to                                                               
     include preventative and restorative services. Thank you.                                                                  
10:08:14 AM                                                                                                                   
Co-Chair Wilken asked whether the  Primary Care Association (PCA)                                                               
had  contacted the  Alaska  Dental Board  in  support of  issuing                                                               
temporary dental  licenses. The  issuing of these  licenses would                                                               
assist in serving some of the people she had spoken of.                                                                         
Dr. White  was unsure.  She was aware,  however, that  the Alaska                                                               
Dental Board  had not taken  any action  in that regard.  PCA has                                                               
taken a  position in support  of the dental health  aide program.                                                               
She also supported  that program as she had  personally worked in                                                               
many  remote  Bush  villages  and could  attest  to  the  skills,                                                               
knowledge, and empathy of the people involved in the program.                                                                   
Co-Chair  Wilken thought  that  the PCA's  "voice  would be  very                                                               
powerful"  in  bringing  the  temporary   license  issue  to  the                                                               
attention of  the Alaska Dental Board.  Their participation could                                                               
advance the  efforts included in this  legislation. Therefore, he                                                               
urged  her   organization  to   investigate  how   other  states'                                                               
experiences  with  temporary  dental  licenses  could  assist  in                                                               
allowing "dentists  to come and serve  some of the less  abled of                                                               
our society".                                                                                                                   
Dr. White  responded positively to Co-Chair  Wilken's suggestion.                                                               
The  Association would  support  this endeavor,  as  many of  its                                                               
member "community  health centers are under-served.  That's a big                                                               
problem  for us."  She was  currently  involved in  an effort  to                                                               
create an  Alaska oral health  care partnership to  provide "more                                                               
dental care and better retention in the State".                                                                                 
Co-Chair Wilken appreciated Dr. White's comments.                                                                               
Senator Olson asked the number of dentists employed by PCA.                                                                     
Dr. White stated  she was the sole PCA dentist.  PCA is advancing                                                               
the  aforementioned  oral health  network  to  improve access  to                                                               
dental care "by  establishing a more cohesive  structure with the                                                               
community  health center  dental  clinics",  furthering a  shared                                                               
provider  program to  improve dental  care access,  and advancing                                                               
other aspects  to improve dental  care opportunities  through the                                                               
10:11:24 AM                                                                                                                   
JEFF JESSEE, Chief Executive Officer,  Alaska Mental Health Trust                                                               
Authority,  thanked  the  Committee for  considering  this  bill.                                                               
AMHTA is interested "in this  bill and dental services in general                                                               
because" many  of AMHTA's  "beneficiaries have  tremendous dental                                                               
needs". AMHTA annually funds a  mini-grant program that "provides                                                               
grants of up  to $3,000 directly to  individual beneficiaries for                                                               
a  wide range  of  things" such  as laptop  computers,  a car  to                                                               
transport  them to  work, or  other expenses  that would  improve                                                               
their  quality  of  life.  AMHTA   "was  stunned"  to  find  that                                                               
approximately  70 to  80 percent  of the  mini-grant funding  was                                                               
used  for dental  services. Spending  one's  mini-grant funds  on                                                               
dental care would not be expected  to be "way up on people's list                                                               
of  things they  want  to do  in  their spare  time  or with  any                                                               
additional dollars they might have".                                                                                            
Mr.  Jessee noted  AMHTA worked  closely with  the Department  to                                                               
construct a  bill with  cost containment  provisions such  as the                                                               
individual  dental service  limit  and the  termination date.  In                                                               
addition  to working  on  this "very  important  bill", AMHTA  is                                                               
working on a  program through which dentists  could donate dental                                                               
service  and be  compensated for  their out  of pocket  expenses.                                                               
Another  effort being  advanced by  AMHTA is  the development  of                                                               
partnerships with  community health centers  "to get them  up and                                                               
running   on   providing   more   comprehensive   dental   care".                                                               
Nonetheless,  the funding  mechanism  proposed in  this bill  "is                                                               
critical" to these  endeavors and to meeting the  dental needs of                                                               
AMHTA beneficiaries.                                                                                                            
10:13:54 AM                                                                                                                   
There  being no  further  testimony, Co-Chair  Green ordered  the                                                               
bill HELD  in Committee in  order to develop  language addressing                                                               
Co-Chair Wilken's concern.                                                                                                      
10:14:22 AM                                                                                                                   
     CS FOR HOUSE BILL NO. 16(RLS)                                                                                              
     "An Act  relating to funding for  school districts operating                                                               
     secondary school  boarding programs,  to funding  for school                                                               
     districts  from which  boarding  students come,  and to  the                                                               
     effectiveness   of   district  secondary   school   boarding                                                               
     programs; and providing for an effective date."                                                                            
This was  the first hearing for  this bill in the  Senate Finance                                                               
Co-Chair Wilken  moved to adopt committee  substitute Version 24-                                                               
LS0125\C as the working document.                                                                                               
Co-Chair Green objected for explanation.                                                                                        
10:15:07 AM                                                                                                                   
RYNNIEVA MOSS,  Staff to Representative John  Coghill, the bill's                                                               
sponsor,   informed  the   Committee  that   five  years   prior,                                                               
Representative Coghill  had spent  time in  Nenana on  a building                                                               
remodeling  project.  Students   attending  the  Nenana  Boarding                                                               
School assisted  in that project. Those  students communicated to                                                               
Representative   Coghill   the   newfound  optimism   they   were                                                               
experiencing as  a result of  attending the boarding  school. The                                                               
experience "changed their  opinion of where they  were going with                                                               
their  life"  and  expanded   their  opportunities  for  becoming                                                               
"productive citizens".                                                                                                          
Ms.   Moss   stated   that,    because   of   this   interaction,                                                               
Representative  Coghill  became   "interested  in  the  so-called                                                               
boarding  school  concept".  This  bill  is  a  product  of  that                                                               
interest.  This bill  has  generated  tremendous discussion.  She                                                               
cited   Co-Chair  Wilken   as  instrumental   in  prompting   the                                                               
Department  of  Education and  Early  Development  (DOE) and  the                                                               
State Board  of Education "to  actually propose  regulations that                                                               
will  regulate these  boarding  schools". Representative  Coghill                                                               
viewed student  attendance at a  boarding school "as an  issue of                                                               
choice, and  an opportunity  for students all  over the  State to                                                               
enter into a  program that can basically change  their life". For                                                               
example,  the Nenana  Boarding School  graduated  14 students  in                                                               
2005:  11  of  those   graduates  continued  their  postsecondary                                                               
education with  financial assistance; two enlisted  in the United                                                               
States  Marines,  and  one  entered the  Job  Corps.  The  entire                                                               
graduating class  improved their life "and  became productive on-                                                               
going citizens".                                                                                                                
Ms.  Moss  stated that  Version  "C"  would allow  any  Statewide                                                               
Secondary Residential  Program (SSRP), commonly referred  to as a                                                               
boarding  school, established  prior to  January 1,  2005, to  be                                                               
reimbursed  for  operating  the  residential  program  through  a                                                               
stipend.  To qualify  for  this  program, the  SSRP  must have  a                                                               
suitable  student  dormitory, daily  access  to  a public  school                                                               
offering grades nine  through 12, and be a full  time school. The                                                               
stipend rate would be determined  by the DOE with the stipulation                                                               
that it could not to exceed  the statutory limits as specified in                                                               
Section 1(b)(2) lines 8 through 12 of Version "C".                                                                              
Ms.  Moss  stated  that  Version  "C"  also  defined  what  would                                                               
constitute  a  school  district  and  what  would  qualify  as  a                                                               
district-operated  Statewide  Residential  Educational  Programs.                                                               
Furthermore,  Version  "C"  would align  language  with  existing                                                               
regulations. An  effective date of  July 1, 2006 is  specified in                                                               
the bill.                                                                                                                       
10:18:51 AM                                                                                                                   
Senator Dyson  asked whether the bill's  sponsor was "comfortable                                                               
with the changes" included in Version "C".                                                                                      
Ms. Moss affirmed he was.                                                                                                       
Senator Dyson  asked whether the  sponsor considered the  $20 per                                                               
student per  day stipend  adequate to feed,  clothe, and  house a                                                               
student at the school.                                                                                                          
Ms. Moss  responded in  the negative.  The sponsor  believed that                                                               
students' parents  and school districts should  contribute toward                                                               
the expense of  the program. Thus, the stipend is  "a portion" of                                                               
the actual costs.                                                                                                               
Senator Dyson acknowledged.                                                                                                     
Senator Bunde understood the stipend  would be paid to the school                                                               
district rather than to the individual.                                                                                         
Ms. Moss affirmed.                                                                                                              
Senator Bunde  asked regarding the  provision that  would provide                                                               
each student a  round trip ticket to the school,  as he felt that                                                               
requiring a  student to personally  "buy-in" would result  in the                                                               
student  being  "more dedicated"  to  the  endeavor. Requiring  a                                                               
student  to  be  responsible  for  their  travel  expenses  might                                                               
further their "incentive to achieve".                                                                                           
Ms. Moss responded  that the majority of students  who attend the                                                               
schools live  in remote  areas of  the State,  thus "the  cost of                                                               
travel is  fairly expensive". While  a student might make  two or                                                               
three  trips  home  during  a   school  year,  the  school  would                                                               
compensate  for only  one round-trip  ticket. The  travel expense                                                               
would amount "to only a small part" of the total student cost.                                                                  
Senator  Bunde  viewed  the  round-trip  ticket  offering  as  "a                                                               
marketing tool:  come to  our school  and we'll  give you  a free                                                               
trip."  The provision  to pay  for the  round-trip ticket  was of                                                               
concern to him.                                                                                                                 
Co-Chair Green  noted that,  in addition to  the stipend  and the                                                               
trip, the  State's Base Student Allocation  (BSA) formula funding                                                               
would also be applicable.                                                                                                       
Ms. Moss responded in the affirmative.                                                                                          
10:21:46 AM                                                                                                                   
Co-Chair  Wilken pointed  out  that the  inclusion  of the  Lower                                                               
Kuskokwim  in   the  Residential   School  Program   details,  as                                                               
specified on page 2 of the DOE  fiscal note #2, dated May 2, 2006                                                               
was an error,  as "the Bethel program was no  longer part of this                                                               
10:22:10 AM                                                                                                                   
EDDY  JEANS, Director,  School Finance,  Department of  Education                                                               
and Early Development, affirmed.  The Department would revise the                                                               
fiscal note to reflect the  removal of the Bethel Lower Kuskokwim                                                               
School from the Residential Program.                                                                                            
Co-Chair Green  acknowledged that  a corrected fiscal  note would                                                               
be developed.                                                                                                                   
Co-Chair Wilken  shared that  a few years  prior, because  of his                                                               
concerns about the  boarding school program, he  had been accused                                                               
of eliminating State  funding for the Nenana  Boarding School. To                                                               
that  point, he  appreciated Representative  Coghill, Ms.  Moss',                                                               
and  the  Department's  efforts   to  address  his  concerns,  as                                                               
evidenced  by  the  inclusion  of the  phrase  "approved  by  the                                                               
department under regulations"  in Section 1, Article  2(a) page 1                                                               
on  line 9  of Version  "C";  specifically the  inclusion of  the                                                               
reference  to State  regulations. He  displayed a  compilation of                                                               
DOE regulations  [copy not provided], which  were currently under                                                               
review. Because of the State  Board of Education's lack of action                                                               
on  overseeing  the  boarding   school  program,  the  Department                                                               
updated  regulations and  developed criteria,  which must  be met                                                               
before someone  could establish a  boarding school program.  As a                                                               
result,  the  State  could  "analyze whether  it's  in  the  best                                                               
interest  of  the  State"  to  allow  the  formation  of  another                                                               
boarding school program.                                                                                                        
10:23:40 AM                                                                                                                   
Co-Chair  Wilken appreciated  the  endeavor to  replace the  term                                                               
"boarding school" with Secondary School Residential Program.                                                                    
Co-Chair  Wilken warned  that the  Federal No  Child Left  Behind                                                               
(NCLB) program  would force the  State to change its  approach to                                                               
education. Many  outlying communities might be  unable to provide                                                               
a  curriculum  and  education  that would  allow  a  student  "to                                                               
perform on the world stage".  Thus, some students might be forced                                                               
to participate in  such things as a SSRP. One  area of concern is                                                               
the negative  impact this would  have on a community  desiring to                                                               
keep  their youth  in  their community.  Another  concern is  one                                                               
relating to  economic development.  State facilities such  as the                                                             
King Career Center  in Anchorage, the Hutchison  Career Center in                                                           
Fairbanks, and  vocational technical  schools in  Kotzebue, Nome,                                                               
Bethel, Seward,  and Galena should  be developed  in anticipation                                                               
of  the pressure  to  meet  NCLB standards.  To  that point,  his                                                               
recent decision not to support  funding for the St. Mary's school                                                               
in  the  FY 07  capital  budget  was  a  difficult one,  as  that                                                               
community was attempting "to do  exactly" what is being discussed                                                               
in this bill.                                                                                                                   
Co-Chair  Wilken  stated  that  were the  proposed  DOE  boarding                                                               
school regulations  not adopted as presented,  the discussions on                                                               
this issue  would continue during  the next  Legislative session.                                                               
The  regulations  are  "good" and  have  widespread  support.  He                                                               
supported the bill  and the sponsor's "efforts to take  us to the                                                               
next step in rural education".                                                                                                  
10:25:58 AM                                                                                                                   
Senator  Bunde informed  the Committee  he would  be offering  an                                                               
amendment to  the bill  that would provide  the funds  to address                                                               
the one  million dollar  fiscal impact  reflected in  fiscal note                                                               
Co-Chair   Green  removed   her   objection   to  the   committee                                                               
Without further objection, committee  substitute, Version "C" was                                                               
ADOPTED as the working document.                                                                                                
Amendment #1: This amendment deletes  all language in Sec. 5 line                                                               
28 of  CS HB 16(RLS) and  replaces it with the  following. [NOTE:                                                               
The amendment must be conformed to Version "C".]                                                                                
     Sec.  5.  The uncodified  law  of  the  State of  Alaska  is                                                               
     amended by adding a new section to read:                                                                                   
          CONTINGENT EFFECT OF SECTIONS 1-4. Sections 1 -4 of                                                                   
     this  Act  are  contingent  on the  passage  by  the  Second                                                               
     Regular   Session   of   the  Twenty-Fourth   Alaska   State                                                               
     Legislature and  enactment into law  of a version of  SB 112                                                               
     that imposes a tax on  residents of and individuals employed                                                               
     in regional educational attendance areas.                                                                                  
     Sec. 6. If  sections 1-4 of this Act take  effect, they take                                                               
     effect on the  effective date of a version of  SB 112 passed                                                               
     by the  Twenty-Fourth Alaska  State Legislature  and enacted                                                               
     into law that imposes a  tax on residents of and individuals                                                               
     employed in regional educational attendance areas.                                                                         
     Sec.  7.  Sections   5  and  6  of  this   Act  take  effect                                                               
     immediately under AS 01.10.070(c).                                                                                         
Senator Bunde moved Amendment #1.                                                                                               
Senator Dyson objected.                                                                                                         
Senator  Bunde   agreed  with  Co-Chair   Wilken  that,   in  the                                                               
foreseeable  future, the  State would  experience an  increase in                                                               
the number of boarding schools.                                                                                                 
10:26:43 AM                                                                                                                   
Senator  Bunde proclaimed  that  many of  these boarding  schools                                                               
would  be located  in Rural  Education  Attendance Areas  (REAAs)                                                               
"where  the  folks unfortunately  haven't  chosen  to accept  the                                                               
personal  responsibility to  support  their schools".  Therefore,                                                               
this  amendment  would   impose  a  tax  that   would  assist  in                                                               
supporting the expenses of a boarding school in an REAA.                                                                        
10:27:22 AM                                                                                                                   
Ms.  Moss stated  the  bill's  sponsor would  be  opposed to  the                                                               
amendment.  "There already  is an  existing stipend  that's being                                                               
paid for  students that  come into  boarding schools."  This bill                                                               
would broaden the opportunity so  that more students could attend                                                               
such a school.  The sponsor would argue that the  tax proposed in                                                               
this amendment "is a whole  separate issue that doesn't belong in                                                               
this piece of legislation".                                                                                                     
Senator  Bunde was  concerned  that the  proposals  in this  bill                                                               
could provide  REAAs an opportunity  to "double-dip",  as schools                                                               
in those areas are already fully supported by State funds.                                                                      
Senator  Olson  voiced  "strong   objection"  to  the  amendment.                                                               
Support of it  would be contrary to the "spirit"  of the original                                                               
A roll call was taken on the motion.                                                                                            
IN FAVOR: Senator Bunde, Co-Chair Wilken and Co-Chair Green                                                                     
OPPOSED:  Senator  Hoffman,  Senator  Olson,  Senator  Dyson  and                                                               
Senator Stedman                                                                                                                 
The motion FAILED (3-4)                                                                                                         
Amendment #1 FAILED to be adopted.                                                                                              
Conceptual Amendment  #2: This amendment deletes  the entirety of                                                               
material in Section 1(b)(1) beginning  on page 2, lines 2 through                                                               
4, which reads as follows.                                                                                                      
     (1)  one  round  trip  on   the  least  expensive  means  of                                                               
     transportation between the  student's community of residence                                                               
     and  the  school during  the  school  year if  the  district                                                               
     expends money for the trip; and                                                                                            
Senator Bunde moved Amendment #2.                                                                                               
Senator Olson objected.                                                                                                         
Senator  Bunde  echoed  his earlier  comments  against  providing                                                               
travel  for students.  Eliminating the  free travel  provision is                                                               
"an  attempt  to   encourage  people  to  invest   in  their  own                                                               
education".  People  work  harder   when  they  have  a  personal                                                               
Ms. Moss  communicated that  the bill's  sponsor would  object to                                                               
the  amendment. While  waivers are  available in  hardship cases,                                                               
parents  of students  attending  the Nenana  Boarding School  are                                                               
currently required  to provide $1,000  toward their  child's room                                                               
and board. The students to whom  a round trip travel ticket would                                                               
be  provided  are  those  with  no road  access  to  the  school.                                                               
Attending the  school is  "an extra  hardship" for  such students                                                               
due  to the  expense and  distance that  must be  traveled. While                                                               
attending the  school is optional,  it should be  recognized that                                                               
the  school is  graduating students  who are  becoming productive                                                               
Alaskans, who otherwise might become "a burden to the State".                                                                   
10:30:41 AM                                                                                                                   
Senator  Bunde  voiced  concern that  instead  of  attending  the                                                               
school in  pursuit of furthering  their education,  some students                                                               
might view  the free travel  as an  opportunity to escape  from a                                                               
small town  or their parents.  "That would defeat the  purpose of                                                               
what the bill is trying to achieve."                                                                                            
Co-Chair Wilken  shared that the  round trip travel was  an issue                                                               
of  discussion during  the  development of  the  bill. The  State                                                               
currently provides a round trip  ticket to students attending the                                                               
Mt. Edgecumbe  School in  Sitka, and,  while the  Nenana Boarding                                                               
School  is  not exactly  the  same  model  as that  school,  "the                                                               
thought was"  that providing  a round trip  ticket to  the Nenana                                                               
Boarding School might alleviate  pressure on Mt. Edgecumbe, which                                                               
has a  waitlist of students.  In addition, the decision  was made                                                               
to  include  in   the  bill  the  requirement   that  the  "least                                                               
expensive" mode of transportation be utilized.                                                                                  
A roll call was taken on the motion.                                                                                            
IN FAVOR: Senator Bunde and Co-Chair Green                                                                                      
OPPOSED: Senator  Olson, Senator Hoffman, Senator  Dyson, Senator                                                               
Stedman and Co-Chair Wilken                                                                                                     
The motion FAILED (2-5)                                                                                                         
Conceptual Amendment #2 FAILED to be adopted.                                                                                   
10:33:03 AM                                                                                                                   
Mr.  Jeans communicated  that  the  Department worked  diligently                                                               
with the  State Board of  Education to develop  "regulations that                                                               
would limit the  number of communities that  could participate in                                                               
this  program"  to  the  communities of  Nenana  and  Galena.  In                                                               
addition, the proposed regulations  would require the State Board                                                               
of  Education to  determine  a need  and  an application  process                                                               
before allowing any  other school district to begin  to operate a                                                               
boarding school.  Furthermore, this legislation would  require an                                                               
additional  step to  be taken  in that  the Department  must seek                                                               
Legislative  approval  in  order   to  expand  the  program.  The                                                               
necessary safeguards would be in place.                                                                                         
Mr. Jeans  shared that  an annual report  on the  boarding school                                                               
program would  also be  required. The  report would  include such                                                               
things  as  the  number  of   students  applying,  accepted,  and                                                               
enrolling  in the  boarding school  program  as well  as the  Mt.                                                               
Edgecumbe   program.  The   data   would  be   shared  with   the                                                               
Co-Chair  Green recalled  that  the FY  07  capital budget  would                                                               
include  one  million dollars  each  for  the Galena  and  Nenana                                                               
boarding schools. She  asked whether the funds  specified in this                                                               
bill would be in addition to that money.                                                                                        
Ms. Moss  stated that  the money included  in the  capital budget                                                               
would be in  addition to the funding specified in  this bill. The                                                               
capital  budget  funds  would be  utilized  to  expand  dormitory                                                               
There  being no  further discussion,  Co-Chair Green  ordered the                                                               
bill HELD in Committee.                                                                                                         
Co-Chair Lyda Green adjourned the meeting at 10:35:13 AM.                                                                     

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