HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES STANDING COMMITTEE March 10, 1998 3:05 p.m. MEMBERS PRESENT Representative Con Bunde, Chairman Representative Joe Green, Vice Chairman Representative Brian Porter Representative Fred Dyson Representative J. Allen Kemplen Representative Tom Brice MEMBERS ABSENT Representative Al Vezey COMMITTEE CALENDAR * HOUSE BILL NO. 459 "An Act relating to medical assistance for certain disabled persons; relating to the priorities established for the medical assistance program." - PASSED CSHB 459(HES) FROM COMMITTEE CS FOR SENATE BILL NO. 11(FIN)(title am) "An Act establishing a reimbursement program for municipal bonds, notes, or other indebtedness incurred for school construction; relating to administrative costs of reimbursing municipal school construction debt; relating to municipal school construction project eligibility requirements for receiving state reimbursement; and providing for an effective date." - PASSED HCS CSSB 11(HES) FROM COMMITTEE HOUSE BILL NO. 169 "An Act relating to welfare to work tax credits under the Alaska Net Income Tax Act; and providing for an effective date." - PASSED CSHB 169(HES) FROM COMMITTEE HOUSE BILL NO. 367 "An Act relating to part-time public school students; and providing for an effective date." - PASSED HB 367 FROM COMMITTEE HOUSE BILL NO. 353 "An Act relating to adoption by reference in regulations; and providing for an effective date." - PASSED CSHB 353(HES) FROM COMMITTEE HOUSE BILL NO. 307 "An Act relating to custody of and visitation rights concerning children; and relating to an obligor's liability to the state for public money paid to support the obligor's children." - BILL HEARING POSTPONED SENATE CONCURRENT RESOLUTION NO. 21 Relating to declaring March 1998 as Sobriety Awareness Month. - BILL WAIVED OUT OF COMMITTEE (* First public hearing) PREVIOUS ACTION BILL: HB 459 SHORT TITLE: MEDICAID FOR LOW-INCOME DISABLED SPONSOR(S): HEALTH, EDUCATION & SOCIAL SERVICES Jrn-Date Jrn-Page Action 02/20/98 2383 (H) READ THE FIRST TIME - REFERRAL(S) 02/20/98 2384 (H) HES 03/10/98 (H) HES AT 3:00 PM CAPITOL 106 BILL: SB 11 SHORT TITLE: SCHOOL DEBT REIMBURSEMENT SPONSOR(S): SENATOR(S) HALFORD, Phillips, Green; REPRESENTATIVE(S) Kohring Jrn-Date Jrn-Page Action 01/13/97 16 (S) PREFILE RELEASED 1/3/97 01/13/97 16 (S) READ THE FIRST TIME - REFERRAL(S) 01/13/97 16 (S) HES, FIN 02/26/97 (S) HES AT 9:00 AM BUTROVICH ROOM 205 02/26/97 (S) MINUTE(HES) 03/21/97 (S) HES AT 9:00 AM BUTROVICH ROOM 205 03/21/97 (S) MINUTE(HES) 03/24/97 (S) MINUTE(HES) 03/24/97 831 (S) HES RPT CS 3DP 2NR SAME TITLE 03/24/97 831 (S) DP:WILKEN, GREEN, WARD; NR:ELLIS, LEMAN 03/24/97 831 (S) ZERO FISCAL NOTE TO SB (DOE) 04/07/97 (S) FIN AT 9:00 AM SENATE FINANCE 532 04/07/97 (S) MINUTE(FIN) 04/08/97 (S) FIN AT 6:00 PM SENATE FINANCE 532 04/08/97 (S) MINUTE(FIN) 04/08/97 (S) MINUTE(FIN) 04/09/97 1048 (S) FISCAL NOTE TO CS (DOE) 04/22/97 (S) FIN AT 5:30 PM SENATE FINANCE 532 04/23/97 (S) FIN AT 8:00 AM SENATE FINANCE 532 04/24/97 (S) FIN AT 8:30 AM SENATE FINANCE 532 04/24/97 (S) MINUTE(FIN) 04/24/97 (S) MINUTE(FIN) 05/02/97 (S) FIN AT 9:00 AM SENATE FINANCE 532 05/02/97 (S) MINUTE(FIN) 05/02/97 (S) MINUTE(RLS) 05/02/97 1642 (S) FIN RPT CS 2DP 3NR 2AM NEW TITLE 05/02/97 1642 (S) DP: TORGERSON, PHILLIPS; NR: PEARCE, 05/02/97 1642 (S) SHARP, ADAMS; AM: PARNELL, DONLEY 05/05/97 1678 (S) INDETERMINATE FN (DOE) 05/05/97 1677 (S) RULES TO CALENDAR 5/5/97 05/05/97 1680 (S) READ THE SECOND TIME 05/05/97 1680 (S) FIN CS ADOPTED UNAN CONSENT 05/05/97 1681 (S) ADVANCE TO THIRD READING FLD Y14 N5 E1 05/05/97 1681 (S) THIRD READING 5/6 CALENDAR 05/06/97 1726 (S) READ THE THIRD TIME CSSB 11(FIN) 05/06/97 1726 (S) TITLE AM 1 ADOPTED Y10 N8 E1 A1 05/06/97 1727 (S) PASSED Y12 N7 E1 05/06/97 1727 (S) EFFECTIVE DATE(S) ADPTD Y17 N2 E1 05/06/97 1727 (S) LINCOLN NOTICE OF RECONSIDERATION 05/06/97 1735 (S) RECON TAKEN UP SAME DAY Y14 N5 E1 05/06/97 1736 (S) PASSED ON RECONSIDERATION Y12 N7 E1 05/06/97 1736 (S) EFFECTIVE DATE(S) ADPTD Y16 N3 E1 05/06/97 1766 (S) TRANSMITTED TO (H) 05/07/97 1594 (H) READ THE FIRST TIME - REFERRAL(S) 05/07/97 1594 (H) HES, FINANCE 05/08/97 1703 (H) CROSS SPONSOR(S): KOHRING 02/26/98 (H) HES AT 3:00 PM CAPITOL 106 02/26/98 (H) MINUTE(HES) 03/10/98 (H) HES AT 3:00 PM CAPITOL 106 BILL: HB 169 SHORT TITLE: WELFARE TO WORK TAX CREDITS SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR Jrn-Date Jrn-Page Action 03/05/97 543 (H) READ THE FIRST TIME - REFERRAL(S) 03/05/97 543 (H) HES, STATE AFFAIRS, FINANCE 03/05/97 543 (H) INDETERMINATE FISCAL NOTE (DHSS) 03/05/97 543 (H) FISCAL NOTE (REV) 03/05/97 543 (H) ZERO FISCAL NOTE (LABOR) 03/05/97 543 (H) GOVERNOR'S TRANSMITTAL LETTER 05/02/97 (H) HES AT 3:30 PM CAPITOL 106 05/02/97 (H) MINUTE(HES) 05/06/97 (H) HES AT 4:00 PM CAPITOL 106 05/06/97 (H) MINUTE(HES) 02/24/98 (H) HES AT 3:00 PM CAPITOL 106 02/24/98 (H) MINUTE(HES) 02/26/98 (H) HES AT 3:00 PM CAPITOL 106 02/26/98 (H) MINUTE(HES) 03/10/98 (H) HES AT 3:00 PM CAPITOL 106 BILL: HB 367 SHORT TITLE: PART-TIME PUBLIC SCHOOL STUDENT ENROLLMEN SPONSOR(S): REPRESENTATIVES(S) DYSON Jrn-Date Jrn-Page Action 01/28/98 2155 (H) READ THE FIRST TIME - REFERRAL(S) 01/28/98 2155 (H) HES 02/12/98 (H) HES AT 3:00 PM CAPITOL 106 02/12/98 (H) MINUTE(HES) 02/27/98 (H) HES AT 3:00 PM CAPITOL 106 02/27/98 (H) MINUTE(HES) 03/10/98 (H) HES AT 3:00 PM CAPITOL 106 BILL: HB 353 SHORT TITLE: REFER IN HSS REGS TO OTHER DOCUMENTS SPONSOR(S): REPRESENTATIVES(S) KELLY, Dyson Jrn-Date Jrn-Page Action 01/26/98 2138 (H) READ THE FIRST TIME - REFERRAL(S) 01/26/98 2138 (H) HES 02/10/98 (H) HES AT 3:00 PM CAPITOL 106 02/10/98 (H) MINUTE(HES) 03/10/98 (H) HES AT 3:00 PM CAPITOL 106 WITNESS REGISTER BOB BRIGGS, Staff Attorney Disability Law Center of Alaska 230 South Franklin, Room 209 Juneau, Alaska 99801 Telephone: (907) 586-1627 POSITION STATEMENT: Testified on HB 459. HOWARD HEDGES Box 779 Homer, Alaska 99603 Telephone: (907) 235-2701 POSITION STATEMENT: Testified in support of HB 459. JOYANNA GEISLER P.O. Box 2474 Homer, Alaska 99603 Telephone: (907) 235-7911 POSITION STATEMENT: Testified on HB 459. JAMES M. SHINE, SR., Chairperson Governor's Committee on Employment and Rehabilitation of People with Disabilities; and Private Attorney 15904 Glacier Highway Juneau, Alaska 99801 Telephone: (907) 789-6166 POSITION STATEMENT: Testified in support of HB 459. PATRICK REINHART, Executive Director State Independent Living Council 1016 West 6th Avenue, Suite 205 Anchorage, Alaska 99501 Telephone: (907) 269-3571 POSITION STATEMENT: Testified in support of HB 459. JON SHERWOOD Division of Medical Assistance Department of Health & Social Services P.O. Box 110660 Juneau, Alaska 99811-0660 Telephone: (907) 465-3355 POSITION STATEMENT: Testified in support of HB 459. RON KREHER, Special Assistant Division of Public Assistance Department of Health & Social Services P.O. Box 110640 Juneau, Alaska 99811-0640 Telephone: (907) 465-3349 POSITION STATEMENT: Testified in support of HB 459. MILLIE RYAN, Planner Governor's Council on Disabilities and Special Education Department of Health & Social Services P.O. Box 240249 Anchorage, Alaska 99524 Telephone: (907) 269-8992 POSITION STATEMENT: Testified in support of HB 459. WALTER MAJOROS, Executive Director Alaska Mental Health Board 431 North Franklin Street Juneau, Alaska 99801 Telephone: (907) 465-3071 POSITION STATEMENT: Testified in support of HB 459. BRETT HUBER, Legislative Assistant to Senator Rick Halford Alaska State Legislature Capitol Building, Room 121 Juneau, Alaska 99801-1182 Telephone: (907) 465-4958 POSITION STATEMENT: Answered questions and commented on CSSB 11(FIN)(title am). JOHN HOLST Sitka School District P.O. Box 1954 Sitka, Alaska 99835 Telephone: (907) 8622 POSITION STATEMENT: Asked questions regarding CSSB 11(FIN) (title am). KEVIN RITCHIE, Executive Director Alaska Municipal League and Alaska Conference of Mayors 217 Second Street Juneau, Alaska 99801 Telephone: (907) 586-1325 POSITION STATEMENT: Testified on CSSB 11(FIN)(title am). HARRIET DRUMMOND Anchorage School District 2139 Hillcrest Place Anchorage, Alaska 99503 Telephone: (907) 279-7722 POSITION STATEMENT: Testified on CSSB 11(FIN)(title am). DIANE KELLER P.O. Box 872611 Wasilla, Alaska 99687 Telephone: (907) 373-7171 POSITION STATEMENT: Testified on CSSB 11(FIN)(title am). ROBERT LEHMAN, Superintendent Mat-Su School District 1748 Lake Lucille Drive Wasilla, Alaska 99654 Telephone: (907) 746-9255 POSITION STATEMENT: Testified on CSSB 11(FIN)(title am). DAN BLANTON P.O. Box 1027 Talkeetna, Alaska 99676 Telephone: (907) 733-2142 POSITION STATEMENT: Testified on CSSB 11(FIN)(title am). KATHLEEN WIGHT-MURPHY, Teacher Finger Lake Elementary School P.O. Box 876166 Wasilla, Alaska 99687 Telephone: (907) 373-0984 POSITION STATEMENT: Testified on CSSB 11(FIN)(title am). JIM NORDLUND, Director Division of Public Assistance Department of Health & Social Services P.O. Box 110640 Juneau, Alaska 99811-0640 Telephone: (907) 465-2680 POSITION STATEMENT: Testified on HB 169. BILL EHLERS, Program Coordinator WOTC Program Department of Labor P.O. Box 25509 Juneau, Alaska 99802-5509 Telephone: (907) 465-5925 POSITION STATEMENT: Testified on HB 169. REPRESENTATIVE PETE KELLY Alaska State Legislature Capitol Building, Room 411 Juneau, Alaska 99801-1182 Telephone: (907) 465-2327 POSITION STATEMENT: Answered questions on HB 353. ACTION NARRATIVE TAPE 98-22, SIDE A Number 0001 CHAIRMAN CON BUNDE called the House Health, Education and Social Services Standing Committee meeting to order at 3:05 p.m. Members present at the call to order were Representatives Bunde, Porter, Dyson and Brice. Representatives Green and Kemplen arrived at 3:06 and 3:08 p.m., respectively. Representative Vezey was absent. He announced that HB 307 was postponed at the sponsor's request and SCR 21 was waived out of committee. HB 459 - MEDICAID FOR LOW-INCOME DISABLED Number 0115 CHAIRMAN BUNDE announced the first bill on the agenda was HB 459, "An Act relating to medical assistance for certain disabled persons; relating to the priorities established for the medical assistance program." He asked Mr. Briggs to come forward to address the bill. Number 0140 BOB BRIGGS, Staff Attorney, Disability Law Center of Alaska, expressed his pleasure at being invited to testify on the subject of expanding the opportunities for employment of persons with disabilities. He handles a wide range of legal matters for persons with disabilities and in the course of his work, he has come to understand how frequently in a person's life, the event of becoming disabled is a radical change in their life and in the course of life's adventure, they focus on getting a job again. The biggest hurdle he hears from people in the disability community is being able to provide for their medical expenses. Medical costs are especially high for people with disabilities. For example, his client Dawn Pedersen, who is a driving force behind expanding the employment opportunities for persons with disabilities, lost her liver to lupus and received a liver transplant. To live today, Dawn takes autoimmune suppression drugs costing about $900 per month and has blood draws done and analyzed monthly. Number 0289 MR. BRIGGS stated the option presented in HB 459 is for the state to provide Medicaid buy-ins for people with disabilities who go back to work. He said the Disability Law Center endorses the concept in HB 459 because it accomplishes the goal of exercising the option. House Bill 459 won't solve all the problems of people with disabilities who are trying to get back to work; it won't benefit all people who are currently unemployed, disabled and on government benefits, but it's a good step in the right direction. He urged the committee to pass HB 459. CHAIRMAN BUNDE noted the committee needed to adopt the proposed committee substitute as the working document. Also, there was an amendment which needed to be addressed. Number 0363 REPRESENTATIVE BRIAN PORTER made a motion to adopt proposed committee substitute 0-LS1504\E, as a work draft. There being no objection, that version was before the committee. Number 0389 CHAIRMAN BUNDE asked Mr. Briggs to speak to the amendment. MR. BRIGGS explained the amendment was not specifically at his request, but he would endorse it. He explained the purpose of the amendment is that persons with disabilities, especially those with severe disabilities, can function and become contributing members of society with personal care attendant services. The amendment would expand the ability for people getting personal care attendant services to receive those services at the workplace and outside the home. The point is that the concept of receiving personal care attendants at the home is too restrictive and this amendment would provide more flexibility for people with disabilities to participate in the community, including the opportunity to work. Number 0487 REPRESENTATIVE TOM BRICE made a motion to adopt Amendment 1 which read: Page 1, line 1, following ";": Insert "relating to personal care services for recipients of medical assistance; and" Page 3, following line 24: Insert a new bill section to read: "*Sec. 3. AS 47.07.900(15) is amended to read: (15) "personal care services in a recipient's home" means services authorized under a service plan [PRESCRIBED BY A PHYSICIAN] in accordance with applicable federal and state law [THE RECIPIENT'S PLAN OF TREATMENT AND PROVIDED BY AN INDIVIDUAL WHO IS (A) QUALIFIED TO PROVIDE THE SERVICES; (B) SUPERVISED BY A REGISTERED NURSE; AND (C) NOT A MEMBER OF THE RECIPIENT'S FAMILY;] Renumber the following bill sections accordingly. CHAIRMAN BUNDE asked if there was any objection. Hearing none, Amendment 1 was adopted. Number 0502 REPRESENTATIVE BRICE referred to page 3, and said the option list refers to services, but line 24 addresses individuals. He asked Mr. Briggs to clarify that for the committee. MR. BRIGGS responded that Representative Brice was pointing out a problem with the draftsmanship of the committee substitute. Section 2 amends AS 47.07.035 which is a list of medical assisted services provided by the state and it sets a priority for when those services should be withdrawn during periods of budgetary shortfall. As Representative Brice pointed out, it's a list of services not a list of persons, but the amendment describes a class of persons whose Medicaid services would be withdrawn and it places those persons at the bottom of the list which creates a very high priority for those people. To solve the draftsmanship problem, he suggested the language be changed to read "individuals receiving services as described in AS 47.07.020(b)(1)" which would make the classes the same. He did not view the defect as anything that should slow the bill down if the committee's not inclined to amend it as suggested. REPRESENTATIVE BRICE commented that it had been a question in his mind and after discussing it with Legislative Legal Services, he wanted it brought before the committee. CHAIRMAN BUNDE viewed it as a technical adjustment that can be rewritten. He noted there were a number of individuals waiting to testify via teleconference. He asked Howard Hedges to present his comments at this time. Number 0728 HOWARD HEDGES testified via teleconference from Homer, stating his support for HB 459 as he was directly affected by the issue of benefits versus going back to work. He suffered a stroke in 1993 which left him disabled, but with the support of his employer and medical people, he went back to work in 1996 for one year and used the transitional benefits that were available. At the end of the year, he could not secure private health care insurance that would cover his medical needs; $1500 a month for medications in addition to physical therapy. In June 1997, he was let go from his job because he would have been a fiscal liability because no insurance coverage was available for him. This past December he had an internal defibrilator installed in his heart, which cost $8,000. Had he not quit his job and gone back on Medicaid benefits, he would have had no insurance coverage and he and his family would have suffered great hardship. Number 0835 MR. HEDGES noted there was something left out of HB 459 which is that persons who receive supplemental security income (SSI) can qualify for this under 1619(b) of the social security regulations. Persons like him who receive social security disability (SSD) insurance can't qualify because of the income level. He urged committee members to look into this issue, because there are a lot of disabled people who want to go back to work and would be able to under HB 459, but individuals like himself would be left out. CHAIRMAN BUNDE thanked Mr. Hedges for his testimony and asked Joyanna Geisler to testify. Number 0893 JOYANNA GEISLER testified via teleconference from Homer. She supported HB 459 in concept because it supports the idea that people with disabilities who are receiving SSI can return to work and contribute to the purchase of their Medicaid services. She believed that was important for a variety of reasons, a couple are that not only do a lot of persons with disabilities need the continued health care service, but they also need the ability to contribute to their own purchase of that insurance. She fully supports Amendment 1 to go along with the Medicaid buy-in option. She expressed caution that while this is a good first step, it has no impact on a number of individuals who do experience a disability and receive SSDI and not SSI. As Mr. Hedges pointed out, SSI recipients can currently qualify for the 1619(b) option allowing them to keep their benefits. CHAIRMAN BUNDE thanked Ms. Geisler for her comments and asked Jim Shine to come forward to present his testimony. Number 1034 JAMES M. SHINE, SR., Chairperson, Governor's Committee on Employment and Rehabilitation of People with Disabilities and Private Attorney, testified in support of HB 459 as amended. He noted there are a number of legislative bills working through the system - HB 348 is a companion bill, as is SB 253. He said, "And of these three bills, yours I think, most adequately addresses the needs of people experiencing disability; in particular because of the priority you have placed on people experiencing disabilities for those services to be removed when it's an optional service as well as the sliding scale which you have adopted by regulation rather than leaving it open to the possibility of a policy determination." Number 1106 REPRESENTATIVE FRED DYSON asked how well the state is doing at employing disabled people? MR. SHINE responded that efforts are being made. He said the Governor's Committee on Employment and Rehabilitation of People with Disabilities is fortunate to have Beverly Reaume, Director of the Division of Personnel, heading up the standing employment committee, and concerted efforts are being made to hire more people with disabilities. The committee is presently working with the Alaska Human Resource Investment Council to encourage employment of people with disabilities. He, along with others in the disabled community would certainly like to see more toward that regard. He discussed plans for a new program under consideration whereby the state Division of Vocational Rehabilitation loans money to an enterprise to acquire a capital asset in exchange for which that business agrees to hire for a period of five years a certain number of people with disabilities. In answer to Representative Dyson's question, he couldn't say exactly how many people with a disability are employed in the state of Alaska. REPRESENTATIVE DYSON inquired if he could logically infer that the state has not done as well in the past as is possible. MR. SHINE reiterated that efforts are being made, but the state is probably not employing as many people with disabilities as the disabled community would like to see. Number 1207 REPRESENTATIVE JOE GREEN asked if persons with disabilities are displacing nonhandicapped persons, or filling a niche that needs to be filled. MR. SHINE replied, "We always say that you are hiring ability; you are not hiring a disability." These are persons who are qualified to do the work who happen to experience a disability and generally do not displace people who are "temporarily able bodied". He said that a disability is probably the most indiscriminate thing that can happen to anyone. It is a pervasive condition of life in the twentieth century. CHAIRMAN BUNDE thanked Mr. Shine for his comments and asked Patrick Reinhart to come forward to testify. Number 1293 PATRICK REINHART, Executive Director, State Independent Living Council, thanked the committee for addressing this issue and expressed support for HB 459, particularly with the amendment. The Independent Living Council felt the personal care attendant was very important in terms of getting people with disabilities back to work. With respect to Representative Dyson's question regarding employment, he said he experiences a disability and has been helped over the years with college classes and with the purchase of a prostethic by the Division of Vocational Rehabilitation in Alaska and in Wisconsin. Those are the type of services provided by the vocational rehabilitation programs across the country. His personal opinion is that Alaska does a good job in getting people with disabilities the education and training needed to get back to work, but there are constant barriers or disincentives to work, such as the Medicaid issue, as well as being able to have personal care attendants come into the office place. These are issues every state is trying to address. Alaska is on the right track with this legislation but there is much more to be done. A lot of money is investment in training people with disabilities to get back to work, but the attitudes of society that people with disabilities can't do the job is the biggest barrier needing to be overcome. CHAIRMAN BUNDE thanked Mr. Reinhart for his remarks and asked Jon Sherwood to come forward. Number 1421 JON SHERWOOD, Division of Medical Assistance, Department of Health & Social Services, expressed the division's support of HB 459 and the amendment. He said, "This option for the working disabled can include people who receive social security disability benefits as long as their benefits are below the needs standard for the adult public assistance program, which is a little less than twice that of the SSI program. So, to the extent that these people would receive Medicaid anyway while receiving the disability benefits, they would be able to go back to work and continue to receive Medicaid." As has been pointed out, that won't address the problem for everybody but it will include a lot more people than are being reached now. CHAIRMAN BUNDE asked Mr. Sherwood to address the fiscal note. MR. SHERWOOD commented the division is of the opinion this will actually save money over time because as people go back to work, there will be less adult public assistance payments. In the short term, the division believes there are some people who currently are able to go back to work and would leave Medicaid and eventually, this option may allow them to continue Medicaid a little longer, so there's a small amount of short term Medicaid cost associated with it, combined with long term savings in the adult public assistance program. The net effect is that over time the division expects the savings will continue to grow as more people are able to go back to work. Number 1548 REPRESENTATIVE BRICE asked Mr. Sherwood if he could explain how the 250 percent federal poverty level relates to SSI and SSDI. MR. SHERWOOD replied that supplemental security payments are right now about $500 a month for an individual, which is about half of what the federal poverty level is for one person. The 250 percent of poverty for a household of four would be well in excess of $40,000 a year. REPRESENTATIVE BRICE said, "So this would cover everybody from $40,000 -- in excess of $40,000 on down with disabilities." MR. SHERWOOD said that was correct, to the extent the earnings were earned income, because earned income can be disallowed. If there were payments from other sources, there may still be some problems. Number 1600 REPRESENTATIVE GREEN asked if the disability had to be a certain degree in order to qualify. MR. SHERWOOD responded this category uses the social security definition of disability, which is the inability to work for at least one year. But it's sometimes referred to as a 100 percent disability standard. An individual can't be able to work, although it allows for a small amount of employment - less than $500 a month. CHAIRMAN BUNDE thanked Mr. Sherwood for testifying and asked Mr. Kreher to present his comments. Number 1645 RON KREHER, Special Assistant, Division of Public Assistance, Department of Health & Social Services, said the division supports HB 459. Any legislation that helps move people toward self- sufficiency and improves the quality of life is in the best interest of the division as well as the state. He volunteered to answer any questions regarding the division's fiscal note. CHAIRMAN BUNDE thanked Mr. Kreher for his comments and called on Millie Ryan to testify. Number 1682 MILLIE RYAN, Planner, Governor's Council on Disabilities and Special Education, said the council had just completed the three- year planning process and had heard from many people across the state wanting to work, but were running into a number of disincentives. She said the Division of Vocational Rehabilitation invests money in training and getting people to work, but when the time comes to look for a job, the disincentives discourage them from working. One of the biggest disincentives is the fear of losing medical coverage, because these people need the medical coverage in order to survive. She said HB 459 is a good beginning; it will help get some people to work. She said the council is reviewing some of the ways to address other disincentives, some of which can probably be addressed at the state level. She said it's important to remember that when people with severe disabilities go to work, often they have expenses that are unique to their disability. Those expenses will not go away just because they are able to work, so it's important to have a gradual reduction in services. Number 1760 REPRESENTATIVE GREEN reflected while working in the oil industry several years ago, there were a group of employees doing rather routine jobs. He recalls having an aide with a mental handicap who was one of the best employees because even though the work was boring, his mind didn't wander because it was a challenge for him and he felt he was making a contribution. He wondered if that same attitude applied to individuals with a physical handicap. MS. RYAN responded that most individuals want to work and are qualified to work. She works most closely with persons with developmental disabilities who may need a job coach to help with the training on the job. For the most part, people with disabilities want to work and that sort of an attitude makes a big difference in people's performance. CHAIRMAN BUNDE thanked Ms. Ryan for her comments and asked Walter Majoros to come forward to testify. Number 1834 WALTER MAJOROS, Executive Director, Alaska Mental Health Board, testified in strong support of HB 459. He reiterated there are a number of people with a mental illness that would like to work, but can't work because of various impediments; the lack of health insurance options has been identified as the biggest impediment to keeping people with mental illnesses being able to engage in employment. Oftentimes people with mental illness who are employed either do not have health insurance, or if they do, it's benefits for physical health issues with minimal mental health coverage or no mental health coverage whatsoever. Often, the high cost of a person's psychotropic medication alone prohibits them from maintaining a job and pay their expenses. He noted the Alaska Mental Health Board meets four times a year and takes testimony at two of the meetings at least, and the single issue heard most over the last several years, has been insurance coverage. House Bill 459 will remove some disincentives to employment for people with mental illnesses and will allow them to choose work over welfare and, to a greater degree, be contributing members of society. CHAIRMAN BUNDE asked Mr. Briggs if he had any closing remarks. Number 1924 MR. BRIGGS expressed his appreciation to the committee for addressing this issue and urged the committee to pass HB 459 and send it on to the Finance Committee. Number 1941 REPRESENTATIVE PORTER summarized that HB 459 purports to employ persons with disabilities or to keep them employed, allowing them to work toward self-sufficiency for a reasonably minor investment for the next two years which would be more than overcome by savings in the next three or four years. Number 1964 REPRESENTATIVE PORTER made a motion to move HB 459 as amended from committee with individual recommendations and attached fiscal notes. There being no objection, CSHB 459(HES) moved from the House Health, Education and Social Services Committee. REPRESENTATIVE DYSON encouraged individuals working with the disabilities community to find a staff person for him next year. CSSB 11(FIN)(Title am) - SCHOOL DEBT REIMBURSEMENT Number 2024 CHAIRMAN BUNDE announced the next order of business was CS FOR SENATE BILL NO. 11(FIN)(title am), "An Act establishing a reimbursement program for municipal bonds, notes, or other indebtedness incurred for school construction; relating to administrative costs of reimbursing municipal school construction debt; relating to municipal school construction project eligibility requirements for receiving state reimbursement; and providing for an effective date." The committee discussed whether the date on page 4, line 14, should be changed from "1997" to "1998". It was determined it should not be changed. He asked Brett Huber to come forward to comment and answer questions. CHAIRMAN BUNDE advised the committee had been discussing the date on page 4, line 14, and had determined it would have an impact on impending bond sales. Number 2202 BRETT HUBER, Legislative Assistant to Senator Rick Halford, Alaska State Legislature, said it was his understanding that it would impact the bonds that will soon be going before to voters in Anchorage. Number 2009 CHAIRMAN BUNDE directed the committee's attention to the amendment that would insert a new section on page 6, line 20. Number 2216 REPRESENTATIVE BRICE made a motion to delete "50" and insert "70" on page 4, line 11. CHAIRMAN BUNDE objected. REPRESENTATIVE BRICE said this amendment was in line with the considerable amount of testimony the committee had received requesting 70 percent state reimbursement. CHAIRMAN BUNDE pointed out the proposed committee substitute needed to be adopted. Number 2263 REPRESENTATIVE BRICE made a motion to adopt proposed committee substitute 0-LS0151\P, Ford, 3/3/98, as a work draft. There being no objection, that version was before the committee. CHAIRMAN BUNDE asked for a roll call vote. Representatives Brice, Dyson and Kemplen voted in favor of the amendment. Representatives Porter, Green and Bunde voted against it. Therefore, Amendment 1 failed by a vote of 3-3. Number 2300 REPRESENTATIVE BRICE made a motion to adopt Amendment 2 which read: *Sec. 6. Insert new section AS 14.11.100. (n) The total amount of school construction projects approved for reimbursement by the department under (a)(8) of this section: (1) May not exceed $231,000,000; and (2) until July 1, 2003 (A) $131,000,000 shall be allocated to projects in a municipality with a population of 200,000 or more people; (B) $40,000 shall be allocated to projects in a municipality with a population of at least 70,000, but less than 200,000; (C) $60,000,000 shall be allocated to projects in a municipality with less than 70,000 people. Renumber the rest of the sections. REPRESENTATIVE BRICE pointed out there was a technical change to the amendment in that (a)(8) should read (a)(6). CHAIRMAN BUNDE objected to Amendment 2 for discussion purposes. REPRESENTATIVE BRICE explained the idea behind Amendment 2 is to provide a certain amount of allocation of debt to the larger municipalities; namely Anchorage and Fairbanks, and the small ones. He could not tie down a specific number on 2(C) which is for municipalities less than 70,000 people, so if anybody .... TAPE 98-22, SIDE B Number 0001 REPRESENTATIVE BRICE .... have more accurate numbers, he would be agreeable to a change. He said, "I arbitrarily hit $60,000,000 - the number I'd gotten from the department was $353,000,000 and I figured that includes everything from Ketchikan to Barrow. I think $60,000,000 is a relatively realistic number for municipalities such as communities on the peninsula and in the valley to address some. If not, you know it would be okay to increase this. But the idea is to provide the level of allocation that the state has for school debt to the municipalities to sort of take off the competitive nature necessarily of getting bonds out and approved by voters and what we've given is a five year time line for those allocations." CHAIRMAN BUNDE asked Mr. Huber to comment on Amendment 2. MR. HUBER said a change in (a)(6) brings it back to a section of the bill that was actually dealing with projects that were bonded and approved between April 30, 1993, and July 1, 1997, so the amendment establishes a cap in a time period during which there could not possibly be a project. REPRESENTATIVE BRICE maintained it would establish it back at 70/30. MR. HUBER noted that language on line 2 reads, "but before July 1, 1997." He added, "But on the policy (indisc.) amendment, I did have a change to talk with Senator Halford and he has two concerns and you've already brought one of them up and that's if you have a time period in which to qualify for these projects, you have $60 million allocated for basically the rest of the state with bonding capacity, other than Anchorage and Fairbanks, who are the only two communities that fit in the two slots, you've got Mat-Su that's already got $51 million worth of projects that local voters said they wanted to bond for. They've testified, I think in the previous hearing on the bill, that they have four or five other schools just to meet the need of unhoused students and overcapacity students now. You've got Sitka that's got two projects that's been approved and looking for funding. You have Ketchikan that has two projects. You have $60 million that doesn't go far enough. And the third, I guess, problem that the Senator sees with the proposed amendment is it puts it back in the discretion of the Department of Education (DOE) which projects get the $60 million because you're going to have more people come forward than the $60 million will serve and the DOE discretion is really the impetus behind the entire bill in the first place. And if you look at the DOE list for its school construction funding and major rehabilitation funding, I think you're going to find again until you get down well into the list, you're not going to see projects and funding for organized tax paying areas of the state." Number 0198 CHAIRMAN BUNDE asked for a roll call vote. Representatives Brice and Kemplen voted in favor of Amendment 2. Representatives Dyson, Porter, Green and Bunde voted against it. Therefore, Amendment 2 failed by a vote of 2-4. Number 0216 MR. HUBER pointed out the proposed committee substitute includes language on page 4, line 2, which reads, "but before July 1, 1997" which adds uniformity to the statute. CHAIRMAN BUNDE noted there were a number of individuals wishing to testify and called John Holst forward to present his comments. Number 0236 JOHN HOLST, Sitka School District, asked if Sitka would fall under the category being discussed. He wanted assurance that the vote taken in the spring of 1996 for two renovation projects would qualify Sitka for the school debt reimbursement. MR. HUBER replied, "Sitka would be under the purview of this bill in a bonding issue in the future - before July 1, 1997, at 50 percent, but what's been passed by Sitka is in the same boat as the Mat-Su schools that (indisc.) at 70 percent (indisc.)." MR. HOLST referred to Section 6 and said it reads 70 percent. MR. HUBER pointed out that Section 6 has already been closed out. MR. HOLST referred to his original question of what does Sitka qualify for because their vote was for 70/30 bonding authority. CHAIRMAN BUNDE understood that it came in after all the funds were expended. MR. HOLST said that was correct; Sitka knew the funds had been expended. However, the intent of the voters was to indicate their willingness to pay for the 30 percent. The municipality has done the design development, is prepared to do the bid documents and start construction in the spring of 1999 if they can get funding. He said the people of Sitka are not real anxious to see the rules change this far into the project and the voters committed at 70/30, not 50/50. CHAIRMAN BUNDE commented the voters committed to a program that no longer exists. MR. HOLST remarked the voters committed to funding at 70/30 with anticipation that the legislature would again authorize that. He said, "Let me back up. If I were going to start testifying, I would come to the podium and say, I think you need to find a bonding mechanism that will allow everyone to participate who can afford to participate, even allowing the Rural Education Attendance Areas (REAA) to stand on the sidelines - any municipality. At 50/50 there will be municipalities that will not be able to participate and I think Governor Hickel's idea of having a sliding scale made a lot of sense to a lot of people and it indicated that everyone was to take part and participate in funding their projects. I think that mentality should still exist and we should still philosophically support that type of system, not one that simply says some municipalities are going to participate and others just won't be able to." CHAIRMAN BUNDE said he understood Mr. Holst's point of view and he would be willing to entertain hearing a bill if it were to be introduced at 70/30; however, this legislation establishes the level at 50/50 and the committee has already expressed their unwillingness to change it to 70/30. MR. HOLST confirmed that he would have to advise the voters that if there's to be any funding, there would have to be another vote for 50/50. He wondered if he was the only person who saw some patently unfairness to that. CHAIRMAN BUNDE noted this legislation would be heard in the Finance Committee and suggested he confer with his area representative who sits on the Finance Committee. He called Kevin Ritchie to the witness stand to testify. Number 0453 KEVIN RITCHIE, Executive Director, Alaska Municipal League and Alaska Conference of Mayors, testified in support of this legislation, but remarked the 70/30 issue needs further discussion. He recognized this was not the Finance Committee, but he hoped that committee members would consider supporting the 70/30 issue on the House Floor at some other time in that even though times are tight on the state level, it also true at the municipal level. He said there will be a significant difference in taxes in each municipality that's going to build schools, and he's confident schools will be built. The difference between a 70/30 split and a 50/50 split for the Mat-Su Valley is one mill of property tax each year over the life of the bonds. It's a very significant issue for taxpayers. He urged committee members to keep an open mind on a 70/30 split. CHAIRMAN BUNDE called on Harriet Drummond to testify next. Number 0520 HARRIET DRUMMOND, Anchorage School District, testified the Anchorage School District is grateful to the legislature for past support in debt reimbursement and it was her hope debt reimbursement could be funded this year. She said that Anchorage is growing by 500 to 1,000 new students a year, which is equivalent to one to two new elementary schools every year to accommodate growth with mid-level and high school construction as required. The existing 1987 facilities require ongoing maintenance, renovation and additions to cover growth and change in programs. There are 140 relocatable classrooms currently in use in the Anchorage School District, or the equivalent of five elementary schools, and there are plans for two new high schools. This is the third year the Anchorage School District is asking voters to fully fund construction bonds locally, and there is a concern that voters will be unwilling to bear that burden for much longer. The bond language was written to take advantage of any debt reimbursement available. She said the Anchorage School District Board encourages the legislature to fund debt reimbursement; the preference is 70/30, but 50/50 would be acceptable. CHAIRMAN BUNDE thanked Ms. Drummond for her comments and called on Diane Keller to present her testimony. Number 0603 DIANE KELLER testified via teleconference from Mat-Su. She agreed with Mr. Holst and asked the committee to reconsider voting on the funding of new schools at the 70/30 level because schools are required by state law, and education should be a priority since children are the state's future leaders. She recognizes that oil revenues are on the decline, so her suggestion was to cut any new programs and build new schools instead. She remarked that local voters passed the bonding issue at the 70/30 level so decreasing it to a 50/50 split would require going back to the voters. A 50/50 split would require $10 million or more from local residents. She supported cuts being made to state government, but encouraged the legislature to help fund the building of new schools at a local level that a community can achieve. CHAIRMAN BUNDE thanked Ms. Keller for her testimony and asked Bob Lehman to present his comments. Number 0669 ROBERT LEHMAN, Superintendent, Mat-Su School District, testified the borough assembly and the school board have passed joint resolutions in favor of the 70/30 split. He said the voters passed the bond issue at a time when there wasn't enough money to go around, but he felt the community should be grandfathered in at 70/30. He said, "I think another thing that needs to be considered at looking at the 70/30 - and I know you're aware of the taxable valuation and how it differs by pupil from one district to another, but our taxable valuation, for example, is about half per pupil as what it is in the Anchorage borough or the Kenai borough, so that means of course that our voters have to pay double the millage rate in order to raise the same amount of money." He noted the growth in the Mat-Su district is the equivalent of about one elementary school per year; about 3,000 students have been added to the enrollment list since the last school was built. The district currently has 64 portables with about a quarter of a million dollars a year of operating monies going for rental. He said if the state passes the 50/50 split, the issue will have to go before the voters again for Talkeetna, Meadow Lake and (indisc.) school, but in the meantime a new high school is needed for Houston, another elementary school is needed in the core area, in addition to a complete remodel of the Wasilla High School and one of the elementary schools in the Palmer area. In addition, about $13 million worth of deferred maintenance costs has been identified. He emphasized the needs are great in the Mat-Su School District. CHAIRMAN BUNDE asked Dan Blanton to present his remarks. Number 0774 DAN BLANTON testified via teleconference from Mat-Su echoing the remarks of Mr. Lehman and Mr. Holst. He believed the money was available when the voters passed the 70/30 bond issue and the government should stand by those commitments. He said legislation should be passed to guarantee ongoing funding for schools so it isn't completely dependent on oil revenues. He said, "I know you're trying, I hope, but I've been in Alaska five years now and we've been in the same position every year and the capital improvement list gets longer and longer. We need to do something starting right away." CHAIRMAN BUNDE thanked Mr. Blanton for his testimony and called on Kathleen Wight-Murphy to present her comments. Number 0813 KATHLEEN WIGHT-MURPHY, Teacher, Finger Lake Elementary School, testified via teleconference from Mat-Su. She agreed and supported comments that had been made by community members. She said that Finger Lake is one of the most overcrowded schools in the Mat-Su Borough, with children being taught in converted bathrooms, hallways and other areas of the school that should not be used for instructional purposes. She reiterated previous comments about the need for the construction of new schools in the borough. She urged the committee to pass this legislation and recommended an amendment to grandfather in those boroughs that have already voted on existing debt reimbursement at the 70/30 level. CHAIRMAN BUNDE thanked Ms. Wight-Murphy for testifying. He commented on the plight of the legislature in that he frequently has heard from people in the Mat-Su Valley who want less government, less money and no taxes, yet even a 50/50 split will require more state spending and a 70/30 split would take considerable more state spending. He noted that comments and pleas are taken very seriously, but the legislature has to deal very realistically with the financial situation. Number 0934 REPRESENTATIVE J. ALLEN KEMPLEN said there is an option available to the citizens of Alaska and explained that last session the legislature deposited $803 million into the corpus of the permanent fund. This year the permanent fund is projected to produce over $1 billion after dividends are paid out and after inflation proofing and legislation has been introduced to deposit the $1 billion back into the corpus of the permanent fund. He was curious how the residents of the Mat-Su Valley felt about part of that money being used for education. CHAIRMAN BUNDE inquired as to the wishes of the committee. Number 0997 REPRESENTATIVE DYSON made a motion to move CSSB 11(FIN)(title am) as amended from committee. There being no objection HCS CSSB 11(HES) moved from the House Health, Education and Social Services Standing Committee. HB 169 - WELFARE TO WORK TAX CREDITS Number 1024 CHAIRMAN BUNDE announced the next item on the calendar was HB 169, "An Act relating to welfare to work tax credits under the Alaska Net Income Tax Act; and providing for an effective date." Number 1031 REPRESENTATIVE GREEN moved to adopt proposed committee substitute 0-GH0082\E as the working document. There being no objection, that version was before the committee. CHAIRMAN BUNDE directed the committee's attention to Amendment 1 and asked Mr. Nordlund to speak to the amendment. Number 1060 JIM NORDLUND, Director, Division of Public Assistance, Department of Health & Social Services, explained this amendment should have been incorporated in the amendment adopted at the last meeting. He said the committee substitute before the committee states the director of employment security needs to certify the accuracy of the activities of a recipient in terms of number of hours being worked and the length of time on public assistance in order for a company to be eligible for the tax credit. He pointed out the commissioner of the Department of Health & Social Services or the Commissioner's designee should actually be certifying the accuracy of this information rather than the director of employment security. Number 1116 REPRESENTATIVE KEMPLEN made a motion to adopt Amendment 1 which reads: Page 2, lines 13 - 14: Delete "director of employment security appointed under AS 23.20.030(a)" Insert "commissioner of the Department of Health and Social Services or the commissioner's designee" Number 1118 CHAIRMAN BUNDE objected for discussion purposes. Number 1121 BILL EHLERS, Program Coordinator, WOTC Program, Department of Labor, said the language change should be on page 2, line 19, instead of page 2, lines 13 - 14. Discussion followed and it was agreed the amendment was drafted properly. Number 1191 CHAIRMAN BUNDE removed his objection to Amendment 1. Hearing no further objection, Amendment 1 was adopted. Number 1251 REPRESENTATIVE BRICE made a motion to move CSHB 169(HES) as amended with individual recommendations and attached fiscal notes from the House Health, Education and Social Services Standing Committee. There being no objection, it was so ordered. HB 367 - PART-TIME PUBLIC SCHOOL STUDENT ENROLLMENT Number 1279 CHAIRMAN BUNDE announced the next item on the agenda was HB 367, "An Act relating to part-time public school students; and providing for an effective date." Number 1203 REPRESENTATIVE DYSON made a motion to move HB 367 from committee. REPRESENTATIVE PORTER asked the sponsor to explain the bill. REPRESENTATIVE DYSON explained HB 158 which passed both houses unanimously last year clearly stated that a school district cannot deny a part-time student unless enrollment would have been denied to a full-time student. He read, "A governing body is not required to allow a part-time enrollment if 1) the enrollment would have been denied even if the enrollee were a full-time student." It basically states that a part-time student will be treated the same as a full-time student. His answer to concerns raised about a senior needing the class to graduate is, if a school would indeed discriminate against other full-time students who didn't need it, then give it to the student needing it for graduation. He had expected the Department of Education to quickly move to bring regulations into conformity with HB 158, but in the meantime HB 367 clarifies that a part-time student cannot be discriminated against. REPRESENTATIVE PORTER noted his intention to support HB 367, but a visiting educator had advised him of an unintended consequence. In at least one school district, some otherwise full-time students needing only one or two courses to graduate were taking advantage of this provision and becoming part-time students which perhaps gives students too much leisure time at the wrong time. CHAIRMAN BUNDE asked if there was objection to the motion to move HB 367 with attached fiscal notes from committee. Hearing none, HB 367 passed from the House Health, Education and Social Services Standing Committee. HB 353 - REFER IN HSS REGS TO OTHER DOCUMENTS Number 1752 CHAIRMAN BUNDE announced the next bill up for consideration was HB 353, "An Act relating to adoption by reference in regulations; and providing for an effective date." He asked Representative Kelly, the sponsor, to explain the committee substitute. Number 1752 REPRESENTATIVE PETE KELLY, Sponsor of HB 353, explained the drafter was of the opinion that some of the language more appropriately belonged in Title 44, the regulations statute, and the language specifically relating to the Department of Health & Social Services involvement would stay in Title 47. He said that is the only change in the proposed committee substitute. He noted a concern had been raised regarding a potential constitutional problem with HB 353; however, he directed the committee's attention to a letter from the Attorney General which advises that it is a valid concern but in their opinion, it is defensible. Number 1849 REPRESENTATIVE PORTER made a motion to adopt proposed committee substitute 0-LS1395\B. There being no objection, that version was before the committee. Number 1886 REPRESENTATIVE KELLY said the Department of Health & Social Services, with its Medicaid billing, is presented with a problem in that Medicaid and other medical federal regulations change rapidly and constantly. Each time a billing code changes, the department is required to promulgate regulations based on those codes. House Bill 353 allows the department to adopt by reference to the federal regulations without having to go through the expensive and time- consuming promulgation process. Number 2012 REPRESENTATIVE PORTER made a motion to move CSHB 353(HES) from committee. There being no objection, CSHB 353(HES) moved from the House Health, Education and Social Services Standing Committee. ADJOURNMENT Number 2039 CHAIRMAN BUNDE adjourned the House Health, Education and Social Services Standing Committee at 4:36 p.m.