ALASKA STATE LEGISLATURE                                                                                  
          HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES                                                                         
                       STANDING COMMITTEE                                                                                     
                         March 23, 2004                                                                                         
                           3:03 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Peggy Wilson, Chair                                                                                              
Representative Carl Gatto, Vice Chair                                                                                           
Representative John Coghill                                                                                                     
Representative Paul Seaton                                                                                                      
Representative Kelly Wolf                                                                                                       
Representative Sharon Cissna                                                                                                    
Representative Mary Kapsner                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 405                                                                                                              
"An  Act  relating  to  reports on  school  and  school  district                                                               
performance;  and relating  to accountability  of public  schools                                                               
and school districts; and providing for an effective date."                                                                     
                                                                                                                                
     - MOVED CSHB 405(EDU) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 333                                                                                                              
"An  Act  relating to  an  endowment  for public  education;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
     - MOVED CSHB 333(HES) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 440                                                                                                              
"An Act  relating to  the Alaska Pioneers'  Home, and  the Alaska                                                               
Veterans'  Home; relating  to eligibility  for  admission to  the                                                               
Alaska  Pioneers' Home  and Alaska  Veterans'  Home; relating  to                                                               
state  veterans' home  facilities; making  conforming amendments;                                                               
and providing for an effective date."                                                                                           
                                                                                                                                
     - MOVED CSHB 440(HES) OUT OF COMMITTEE                                                                                     
                                                                                                                                
SENATE BILL NO. 201                                                                                                             
"An Act  relating to  home care and  respite care;  and providing                                                               
for an effective date."                                                                                                         
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 405                                                                                                                  
SHORT TITLE: SCHOOL PERFORMANCE DESIGNATION/REPORT                                                                              
SPONSOR(S): REPRESENTATIVE(S) GATTO                                                                                             
                                                                                                                                
01/28/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/28/04       (H)       EDU, HES                                                                                               
02/17/04       (H)       EDU AT 11:00 AM CAPITOL 124                                                                            
02/17/04       (H)       <Bill Hearing Postponed>                                                                               
03/02/04       (H)       EDU AT 11:00 AM CAPITOL 124                                                                            
03/02/04       (H)       Heard & Held                                                                                           
03/02/04       (H)       MINUTE(EDU)                                                                                            
03/09/04       (H)       EDU AT 11:00 AM CAPITOL 124                                                                            
03/09/04       (H)       Moved CSHB 405(EDU) Out of Committee                                                                   
03/09/04       (H)       MINUTE(EDU)                                                                                            
03/18/04       (H)       EDU RPT CS(EDU) 5DP 1NR                                                                                
03/18/04       (H)       DP: SEATON, WILSON, OGG, GARA, GATTO;                                                                  
03/18/04       (H)       NR: WOLF                                                                                               
03/23/04       (H)       HES AT 3:00 PM CAPITOL 106                                                                             
                                                                                                                                
BILL: HB 333                                                                                                                  
SHORT TITLE: PUBLIC SCHOOL ENDOWMENT                                                                                            
SPONSOR(S): REPRESENTATIVE(S) OGG, COGHILL, HOLM                                                                                
                                                                                                                                
01/12/04       (H)       PREFILE RELEASED 1/2/04                                                                                
01/12/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/12/04       (H)       EDU, HES, FIN                                                                                          
01/27/04       (H)       EDU AT 11:00 AM CAPITOL 124                                                                            
01/27/04       (H)       <Bill Hearing Postponed>                                                                               
03/02/04       (H)       EDU AT 11:00 AM CAPITOL 124                                                                            
03/02/04       (H)       Heard & Held                                                                                           
03/02/04       (H)       MINUTE(EDU)                                                                                            
03/09/04       (H)       EDU AT 11:00 AM CAPITOL 124                                                                            
03/09/04       (H)       Heard & Held                                                                                           
03/09/04       (H)       MINUTE(EDU)                                                                                            
03/16/04       (H)       EDU AT 11:00 AM CAPITOL 124                                                                            
03/16/04       (H)       Moved CSHB 333(EDU) Out of Committee                                                                   
03/16/04       (H)       MINUTE(EDU)                                                                                            
03/18/04       (H)       HES AT 3:00 PM CAPITOL 106                                                                             
03/18/04       (H)       <Above Item Removed from Agenda>                                                                       
03/18/04       (H)       MINUTE(HES)                                                                                            
03/22/04       (H)       EDU RPT CS(EDU) NT 3DP 4NR                                                                             
03/22/04       (H)       DP: OGG, WILSON, GATTO; NR: SEATON,                                                                    
03/22/04       (H)       GARA, WOLF, KAPSNER                                                                                    
03/23/04       (H)       HES AT 3:00 PM CAPITOL 106                                                                             
                                                                                                                                
BILL: HB 440                                                                                                                  
SHORT TITLE: PIONEERS' HOMES/VETERANS' HOMES                                                                                    
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
02/05/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/05/04       (H)       MLV, HES, FIN                                                                                          
03/04/04       (H)       MLV AT 3:00 PM CAPITOL 120                                                                             
03/04/04       (H)       Heard & Held                                                                                           
03/04/04       (H)       MINUTE(MLV)                                                                                            
03/18/04       (H)       MLV AT 1:00 PM CAPITOL 124                                                                             
03/18/04       (H)       Moved CSHB 440(MLV) Out of Committee                                                                   
03/18/04       (H)       MINUTE(MLV)                                                                                            
03/22/04       (H)       MLV RPT CS(MLV) NT 6DP 1AM                                                                             
03/22/04       (H)       DP: WEYHRAUCH, CISSNA, MASEK,                                                                          
03/22/04       (H)       DAHLSTROM, GRUENBERG, STEPOVICH;                                                                       
03/22/04       (H)       NR: LYNN                                                                                               
03/23/04       (H)       HES AT 3:00 PM CAPITOL 106                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
LES MORSE, Director                                                                                                             
Assessment and Accountability                                                                                                   
Department of Education and Early Development                                                                                   
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 405 and answered                                                                
questions from the members.                                                                                                     
                                                                                                                                
CLIFF STONE, Staff                                                                                                              
to Representative Dan Ogg                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified on behalf of the sponsor of HB                                                                   
333.                                                                                                                            
                                                                                                                                
EDDY JEANS, School Finance and Facilities Section                                                                               
Education Support Services                                                                                                      
Department of Education and Early Development                                                                                   
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  During discussion of HB 333, answered                                                                      
questions.                                                                                                                      
                                                                                                                                
REPRESENTATIVE DAN OGG                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Spoke as the sponsor of HB 333.                                                                            
                                                                                                                                
DENNIS DeWITT, Special Assistant                                                                                                
Office of the Governor                                                                                                          
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in  support of HB 440 and answered                                                               
questions of the members.                                                                                                       
                                                                                                                                
ED KNOEBEL, Service Officer                                                                                                     
Legion Post 27                                                                                                                  
Glennallen, Alaska                                                                                                              
POSITION  STATEMENT:   Testified on  HB 440  and asked  questions                                                               
concerning the bill.                                                                                                            
                                                                                                                                
JOHN VOWELL, Director                                                                                                           
Division of Alaska Longevity Programs                                                                                           
Department of Health and Social Services                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified on HB 440 and answered questions.                                                                
                                                                                                                                
CHARLIE HUGGINS, Director                                                                                                       
Office of Veteran Affairs                                                                                                       
Department of Military and Veterans Affairs                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 440.                                                                            
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 04-21, SIDE A                                                                                                            
Number 0001                                                                                                                     
                                                                                                                                
CHAIR PEGGY WILSON called the  House Health, Education and Social                                                             
Services  Standing  Committee  meeting  to  order  at  3:03  p.m.                                                               
Representatives Wilson,  Wolf, Cissna,  and Kapsner  were present                                                               
at  the  call to  order.    Representatives Gatto,  Coghill,  and                                                               
Seaton joined the meeting as it was in progress.                                                                                
                                                                                                                                
HB 405-SCHOOL PERFORMANCE DESIGNATION/REPORT                                                                                  
                                                                                                                                
Number 0119                                                                                                                     
                                                                                                                                
CHAIR WILSON announced that the  first order of business would be                                                               
HOUSE BILL  NO. 405, "An  Act relating  to reports on  school and                                                               
school district  performance; and  relating to  accountability of                                                               
public  schools  and  school  districts;  and  providing  for  an                                                               
effective date."                                                                                                                
                                                                                                                                
The committee took an at-ease from 3:05 p.m. to 3:07 p.m.                                                                       
                                                                                                                                
Number 0195                                                                                                                     
                                                                                                                                
CHAIR WILSON announced for the  record that Representatives Gatto                                                               
and Seaton have joined the meeting.                                                                                             
                                                                                                                                
Number 0202                                                                                                                     
                                                                                                                                
REPRESENTATIVE  CARL GATTO,  Alaska State  Legislature, testified                                                               
as  sponsor  of HB  405.    He  told  the members  that  [school]                                                               
designators are a way to  identify whether schools are doing well                                                               
or poorly.   Representative  Gatto explained  that there  are two                                                               
sets of  designators which  are different, one  set on  the state                                                               
level and one set on the  federal level.  This fact causes double                                                               
the  work  for   districts,  so  this  bill   changes  the  state                                                               
designators   to    comply   with   the    federal   designators.                                                               
Representative Gatto  told the  members that  the state  uses the                                                               
terms  distinguished,  successful,  deficient, or  in  crisis  as                                                               
designators,  while the  federal  designators are  distinguished,                                                               
proficient,    in    improvement,    corrective    action,    and                                                               
restructuring.  This  legislation would reduce the  burden on the                                                               
schools, he reiterated.                                                                                                         
                                                                                                                                
CHAIR  WILSON commented  that the  schools  would likely  welcome                                                               
this change.                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO agreed.   He said that  the school districts                                                               
are supportive of this change.                                                                                                  
                                                                                                                                
Number 0349                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON  asked if the change  of designations would                                                               
in any way impact on going  tracking that has been conducted over                                                               
a period of time.                                                                                                               
                                                                                                                                
LES  MORSE, Director,  Assessment and  Accountability, Department                                                               
of Education  and Early Development,  testified in support  of HB                                                               
405  and answered  questions from  the members.   In  response to                                                               
Representative Seaton's  question, he  told the members  that the                                                               
change in  designators would have  no impact.  He  explained that                                                               
the  designator system  was to  come into  effect and  would have                                                               
first  been  required  this  fall.    Mr.  Morse  clarified  that                                                               
inconsistency problems associated  with two different designators                                                               
would occur if this legislation does not pass.                                                                                  
                                                                                                                                
Number 0451                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON  moved to report CSHB  405(EDU), Version I,                                                               
out  of   committee  with  individual  recommendations   and  the                                                               
accompanying  fiscal  notes.   There  being  no  objection,  CSHB                                                               
405(EDU),  Version  I,  was  reported   from  the  House  Health,                                                               
Education and Social Services Standing Committee.                                                                               
                                                                                                                                
HB 333-PUBLIC SCHOOL ENDOWMENT                                                                                                
                                                                                                                                
Number 0628                                                                                                                     
                                                                                                                                
CHAIR WILSON announced  that the next order of  business would be                                                               
HOUSE BILL NO.  333, "An Act relating to an  endowment for public                                                               
education; and providing for an effective date."                                                                                
                                                                                                                                
Number 0680                                                                                                                     
                                                                                                                                
CLIFF  STONE,  Staff  to Representative  Dan  Ogg,  Alaska  State                                                               
Legislature,  testified  on  behalf of  Representative  Ogg,  the                                                               
sponsor of  HB 333.   Mr.  Stone pointed  out that  the committee                                                               
packet should  include some talking points  as well as a  copy of                                                               
the  fax sent  to  Don Bullock,  Legislative  Legal and  Research                                                               
Services,  regarding the  conceptual  amendments  adopted by  the                                                               
House Special  Committee on  Education.  He  also noted  that the                                                               
committee  should   be  in  receipt  of   a  possible  conceptual                                                               
amendment to  AS 37.14.110.   Mr. Stone  read the  following from                                                               
the "Talking Points on CSHB 333":                                                                                               
                                                                                                                                
     This  Bill  endows the  University  of  Alaska and  the                                                                    
     Public School Trust Fund with land grants.                                                                                 
                                                                                                                                
     Each  will  receive  a grant  of  undivided  2  percent                                                                    
     interest  in  all  state  domain   land.    Rights  and                                                                    
     management will be  retained by DNR.  DNR  will not owe                                                                    
     a heightened  fiduciary duty  to either  the University                                                                    
     or  the Education  Trust Fund  who  each shall  receive                                                                    
     receipts  annually  from   their  respective  interests                                                                    
     after  deducting contributions  to  the permanent  fund                                                                    
     and deducting  administrative/service fees,  et cetera.                                                                    
     Receipts are  limited to new receipts  accruing to each                                                                    
     interest after the effective date  of this act.  In the                                                                    
     later  sections of  this bill  it  does rescind  Senate                                                                    
     Bill 7.                                                                                                                    
                                                                                                                                
MR.  STONE  recalled  a  question  asked  in  the  House  Special                                                               
Committee  on Education  regarding  whether  the existing  public                                                               
school trust  fund be utilized  instead of creating  an endowment                                                               
trust  fund.    He  explained  that  Eddy  Jeans,  Department  of                                                               
Education and  Early Development,  said the  aforementioned could                                                               
be  done  with  different  language.   The  conceptual  amendment                                                               
required  to accomplish  that is  at the  bottom of  the "Talking                                                               
Points  on  CSHB  333".    Mr. Stone  also  recalled  a  question                                                               
regarding the transfer of an  interest in state lands and mineral                                                               
rights to these trusts, as there  was concern that it may violate                                                               
Section 6(i) of the Statehood  Compact.  The university indicated                                                               
that  not to  be  the case,  as does  a  1964 attorney  general's                                                               
opinion,  which says,  "The  use of  the  words 'hereby  granted'                                                               
signifies a  present grant of  lands to be  thereafter identified                                                               
by selection.   By virtue of that grant the  state became at once                                                               
vested with the  right of property in selected lands.   It cannot                                                               
be divested of such a right."                                                                                                   
                                                                                                                                
Number 0905                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON  moved to adopt CSHB  333(EDU), Version 23-                                                               
LS0991\C, as  the working  document.   There being  no objection,                                                               
CSHB 333(EDU) is before the committee.                                                                                          
                                                                                                                                
MR.  STONE  related  to  the committee  that  the  House  Special                                                               
Committee  on  Education  felt  it   was  important  to  have  an                                                               
applicability section as  is found in Section 7.   He pointed out                                                               
that  "new" language  wasn't  added to  that  section because  it                                                               
isn't defined.   The definition for  "new" could be as  simple as                                                               
"a  lease entered  into or  production or  after this  particular                                                               
date".  However, the drafter  noted that the aforementioned would                                                               
open  some arguments  with  regard to  what  constitutes a  lease                                                               
because a lease can be from two different pools of oil.                                                                         
                                                                                                                                
MR.  STONE  turned  to House  Special  Committee  on  Education's                                                               
desire to conform the legislation  to the sponsor's intent in [AS                                                               
14.40].507  to not  sell  land,  but to  receive  revenue.   This                                                               
change is  on page 6 and  meets the sponsor's intent  that it's a                                                               
tenant  in  common  and  an  undivided 2  percent  for  both  the                                                               
university and the K-12 system.   The new language specifies that                                                               
DNR doesn't owe  the University of Alaska  a heightened fiduciary                                                               
duty.   Furthermore,  page 6,  lines 16-21,  specifies that  land                                                               
conveyed  to  the  university  or  the  education  trust  doesn't                                                               
include an  interest in  possession of land.   The  Department of                                                               
Natural  Resources, upon  a cursory  review, is  happy with  this                                                               
section, as  is Joe  Beedle, University of  Alaska.   He directed                                                               
attention  to  page 5,  line  28,  which includes  the  following                                                               
language change:   "receipts derived  from the management  of the                                                               
land conveyed" in order to meet the sponsor's intents.                                                                          
                                                                                                                                
Number 1155                                                                                                                     
                                                                                                                                
MR. STONE  recalled that many  in the House Special  Committee on                                                               
Education expressed  concern with regard to  how this legislation                                                               
interacts with  the 25 percent that  is constitutionally mandated                                                               
to go into  the permanent fund from the sale  of these leases and                                                               
royalties.   Therefore, on page  5, line 31, the  language "after                                                               
deducting  contributions to  the Alaska  permanent fund  that are                                                               
required  by law"  was included.   To  that same  end on  page 6,                                                               
lines 13-14,  the language "after deducting  contributions to the                                                               
Alaska  permanent  fund  required  by  law  and  after  deducting                                                               
administrative  service  fees,  application  fees,  filing  fees,                                                               
processing fees, or  other similar fees" was added.   The drafter                                                               
has  assured the  sponsor that  those two  areas won't  upset the                                                               
constitutional mandate.                                                                                                         
                                                                                                                                
Number 1300                                                                                                                     
                                                                                                                                
CHAIR  WILSON moved  that  the committee  adopt  Amendment 1,  as                                                               
follows:                                                                                                                        
                                                                                                                                
     Page 5, line 27:                                                                                                           
          Delete "equal shares"                                                                                                 
       Insert   "three-fifths   and   two-fifths   shares                                                                       
          respectively"                                                                                                         
                                                                                                                                
REPRESENTATIVE GATTO  objected, and inquired  as to the  share of                                                               
the budget that K-12 and the university currently receive.                                                                      
                                                                                                                                
Number 1353                                                                                                                     
                                                                                                                                
EDDY  JEANS, School  Finance  and  Facilities Section,  Education                                                               
Support Services, Department of  Education and Early Development,                                                               
said that he couldn't answer that.                                                                                              
                                                                                                                                
CHAIR  WILSON  interjected that  it's  more  than two-fifths  and                                                               
three-fifths.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  SEATON  highlighted  that this  legislation  also                                                               
eliminates SB  7, which was  the 250,000 acres to  be transferred                                                               
to  the  university.    Therefore,   that  land  grant  would  be                                                               
eliminated.  Representative Seaton inquired  as to the balance of                                                               
that income.                                                                                                                    
                                                                                                                                
Number 1435                                                                                                                     
                                                                                                                                
REPRESENTATIVE DAN  OGG, Alaska State Legislature,  sponsor of HB                                                               
333,  explained that  the intent  was to  replace the  land grant                                                               
that was  in SB  7 with  the land  grant proposed  in HB  333 and                                                               
provide it  to K-12 as  well as the  university.  He  pointed out                                                               
that  the land  grant under  SB  7 hasn't  been transferred,  and                                                               
therefore the selections haven't been  made.  Furthermore, such a                                                               
transfer would be  onerous because under the terms of  SB 7 there                                                               
has to  be an  agreement between  DNR and  the university.   This                                                               
fall  the  administration has  put  forth  two proposals  to  the                                                               
university, but  no agreement  could be reached.   Even  if there                                                               
was  agreement, the  university  would have  to  come before  the                                                               
legislature for  approval.   Representative Ogg  highlighted that                                                               
his  proposal  provides  quite  a  savings.    In  essence,  this                                                               
legislation would  take the place of  the land grant under  SB 7.                                                               
With regard to what is  lost, Representative Ogg opined that K-12                                                               
would gain.  He explained  that presently the public school trust                                                               
has a .5  percent of the current revenue stream  and that fund is                                                               
at $275 million  and will provide about $12 million  to K-12 this                                                               
year.  The university's land  grant trust fund from existing land                                                               
has a balance  of about $80 million.   Representative Ogg related                                                               
his understanding that [Amendment  1] would increase K-12 portion                                                               
at a greater rate than the university.                                                                                          
                                                                                                                                
REPRESENTATIVE  SEATON asked  if  [Amendment 1]  is a  reasonable                                                               
balance against 250,000 acres.                                                                                                  
                                                                                                                                
REPRESENTATIVE OGG  recalled that  when the  legislation referred                                                               
to 1  percent, Mr. Beedle believed  that the 1 percent  over time                                                               
would be better for the university than the 250,000 acres.                                                                      
                                                                                                                                
Number 1637                                                                                                                     
                                                                                                                                
REPRESENTATIVE GATTO withdrew his objection to Amendment 1.                                                                     
                                                                                                                                
CHAIR WILSON, upon hearing no  further objections, announced that                                                               
Amendment 1 was adopted.                                                                                                        
                                                                                                                                
REPRESENTATIVE  COGHILL asked  if  Amendment 1  would change  the                                                               
language necessary  on page  5, line 22,  where is  says "equally                                                               
for the  support of public  elementary and  secondary education."                                                               
Representative Coghill explained  that he wanted to  be sure that                                                               
if the intention  is divide what goes between  post secondary and                                                               
secondary education would there be  any discussion with regard to                                                               
primary and secondary education.                                                                                                
                                                                                                                                
REPRESENTATIVE  SEATON opined  that Amendment  1 would  designate                                                               
that three-fifths of  the 4 percent would go  into this education                                                               
trust fund  and wouldn't  impact the  split [between  primary and                                                               
secondary education].                                                                                                           
                                                                                                                                
Number 1741                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON  moved that the committee  adopt Conceptual                                                               
Amendment 2, which would:   "replace in the bill where applicable                                                               
language  creating an  education trust  fund and  board with  the                                                               
existing public  school trust fund  and public school  trust fund                                                               
advisory board (AS 37.14.110-170)."                                                                                             
                                                                                                                                
REPRESENTATIVE COGHILL objected for discussion purposes.                                                                        
                                                                                                                                
REPRESENTATIVE SEATON  referred to Mr. Stone's  earlier testimony                                                               
that there is  no need to create an education  trust fund because                                                               
the existing  public school trust  fund can be utilized  for this                                                               
purpose.   This legislation would merely  provide another revenue                                                               
stream into the existing public school trust fund.                                                                              
                                                                                                                                
REPRESENTATIVE COGHILL removed his objection.                                                                                   
                                                                                                                                
Number 1798                                                                                                                     
                                                                                                                                
CHAIR WILSON,  upon determining there  was no  further objection,                                                               
announced that Amendment 2 was adopted.                                                                                         
                                                                                                                                
Number 1810                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON moved to report  CSHB 333(EDU), as amended,                                                               
out  of   committee  with  individual  recommendations   and  the                                                               
accompanying  fiscal  notes.   There  being  no  objection,  CSHB                                                               
333(HES)  was  reported  from the  House  Health,  Education  and                                                               
Social Services Standing Committee.                                                                                             
                                                                                                                                
HB 440-PIONEERS' HOMES/VETERANS' HOMES                                                                                        
                                                                                                                                
Number 1890                                                                                                                     
                                                                                                                                
CHAIR WILSON announced  that the next order of  business would be                                                               
HOUSE  BILL NO.  440, "An  Act relating  to the  Alaska Pioneers'                                                               
Home, and the Alaska Veterans'  Home; relating to eligibility for                                                               
admission  to  the Alaska  Pioneers'  Home  and Alaska  Veterans'                                                               
Home;  relating  to  state   veterans'  home  facilities;  making                                                               
conforming amendments; and providing for an effective date."                                                                    
                                                                                                                                
Number 1918                                                                                                                     
                                                                                                                                
DENNIS DeWITT,  Special Staff Assistant, Office  of the Governor,                                                               
testified  in support  of HB  440 and  answered questions  of the                                                               
members.   He  told  the  members that  HB  440  would allow  the                                                               
administration  to  proceed with  the  conversion  of the  Palmer                                                               
Pioneers'  Home to  a veterans  home.   The [existing]  pioneers'                                                               
home waiting  list would be  used to fill  the beds in  the home.                                                               
The population would be 75  percent veterans and the remaining 25                                                               
percent would be filled from the waiting list.                                                                                  
                                                                                                                                
Number 1982                                                                                                                     
                                                                                                                                
MR.  DeWITT  explained  that  there   is  a  20-year  history  in                                                               
implementing a way  for Alaska's veterans to  get their veterans'                                                               
benefits.   He has been involved  in the process for  the last 14                                                               
years, he added.  The  administration has worked closely with the                                                               
U.S. Department of  Veterans Affairs (VA).   Through this process                                                               
it was  determined that  the Palmer Pioneers'  Home was  the best                                                               
option in providing  a veteran home with the least  impact on the                                                               
pioneer home system.                                                                                                            
                                                                                                                                
MR. DeWITT said that last August the  VA sent a team to tour both                                                               
the Anchorage and  Palmer Pioneers' homes and  provided the state                                                               
with  suggestions  in implementing  a  VA  home.   One  of  their                                                               
primary interest  was the pioneers'  homes approach  to geriatric                                                               
care.   Mr.  DeWitt emphasized  that the  VA found  the pioneers'                                                               
homes program  very good.   It was  explained that Alaska  uses a                                                               
social model as opposed to  the traditional medical model used in                                                               
most  veteran  homes  [in  the   United  States].    The  primary                                                               
difference  is that  in the  social model  an effort  is made  to                                                               
consider an individual's care and  needs, and implement them in a                                                               
home-like setting for the rest of  the resident's life or time in                                                               
the facility.   The medical model emphasizes  caring for specific                                                               
medical needs in  more of a nursing home setting,  rather than an                                                               
assisted living home.   It took a day and a half  for the VA team                                                               
to  understand  what  was  being done  and  appreciate  the  high                                                               
quality program that  was being provided in  the pioneers' homes.                                                               
When  the team  left Alaska  the  members were  saying that  they                                                               
wanted  to  take this  program  [as  a  model] and  implement  it                                                               
throughout  the veterans  homes  system.   Mr. DeWitt  summarized                                                               
that  the administration  felt very  proud of  the program  being                                                               
offered in Alaska.                                                                                                              
                                                                                                                                
Number 2112                                                                                                                     
                                                                                                                                
MR. DeWITT  said the VA  then sent its  architect to look  at the                                                               
Palmer Pioneers' Home  to see what changes would need  to be made                                                               
to ensure it  meets federal standards.  The  heating and plumbing                                                               
systems need  to be brought up  to standards that will  provide a                                                               
functional building  for 20 years  into the future.   The capital                                                               
expenditures  required to  meet these  standards would  be shared                                                               
with the federal  government who would pay 65  percent, while the                                                               
state will  pay 35  percent of  the upgrade.   As  the transition                                                               
into a veterans home proceeds  those individuals who are veterans                                                               
will  be eligible  to receive  $26.95 per  day reimbursement  for                                                               
their cost of care.  For  those who are currently paying for care                                                               
at the  pioneers' home out  of their  own pocket that  would mean                                                               
about an $800  per month offset of their payment.   For those who                                                               
are being subsidized  fully by the pioneers' home,  that would be                                                               
an offset  of about $800 per  month from the general  fund.  That                                                               
is a strong reason to move in this direction, he commented.                                                                     
                                                                                                                                
MR. DeWITT told  the members that the administration  is about 99                                                               
percent completed  with its  negotiations.   He noted  that there                                                               
are  currently  some  points  to  be  clarified  with  the  under                                                               
secretary  of the  VA which  would  confirm the  administration's                                                               
understanding  of   the  status  of   the  veterans'  home.     A                                                               
preliminary response  confirms that  the VA  is in  agreement and                                                               
that  as soon  as legislation  has been  approved the  state will                                                               
move forward.  The funding for  this project is in the fast track                                                               
supplemental budget bill  which will provide a 4 to  6 month jump                                                               
in  moving  forward.    The   federal  match  funding  should  be                                                               
available  by  October when  the  state  will be  reimbursed,  he                                                               
added.                                                                                                                          
                                                                                                                                
Number 2205                                                                                                                     
                                                                                                                                
MR.  DeWITT   shared  that  the  administration   is  working  on                                                               
transition issues.   He emphasized that HB 440  has language that                                                               
guarantees  that  no  one  in  the pioneers'  home  now  will  be                                                               
required to  move because  of the change  from pioneers'  home to                                                               
veterans'   home  status.     Mr.   DeWitt  explained   that  the                                                               
administration told the  VA that it believes there  will be about                                                               
a  five-year  transition  period;  however, the  VA  believes  it                                                               
should be longer.   So at this period in  time the administration                                                               
has an open  transition period, he added.   The general operating                                                               
standards that  are currently in  place will continue,  but there                                                               
may be a few slight accommodations  to ensure all the VA criteria                                                               
is  met.     Mr.  DeWitt   stated  that  the   administration  is                                                               
comfortable that the estimated  $3.5 million capital construction                                                               
appropriation will  be adequate to accomplish  necessary changes.                                                               
In  summary,  Mr.  DeWitt  explained that  the  main  reason  the                                                               
administration looked at the Palmer  Pioneers' Home for a VA home                                                               
is that [the VA  would allow] Alaska to have a 79  bed home.  The                                                               
Palmer facility  has 83 beds  and the VA is  comfortable allowing                                                               
the extra [4] beds.                                                                                                             
                                                                                                                                
Number 2364                                                                                                                     
                                                                                                                                
ED  KNOEBEL,  Legion Post  27,  testified  on  HB 440  and  asked                                                               
questions concerning the bill.   He said that he understands that                                                               
the average  reimbursement rate by  the VA is  approximately $800                                                               
per month  for care in  a VA home and  the state will  pickup the                                                               
rest of  the cost.  If  a person is drawing  social security will                                                               
the individual  be allowed  to keep  those funds  or would  it be                                                               
used for payment of care [in the home].                                                                                         
                                                                                                                                
Number 2400                                                                                                                     
                                                                                                                                
JOHN  VOWELL, Director,  Division of  Alaska Longevity  Programs,                                                               
Department of  Health and  Social Services,  testified on  HB 440                                                               
and  answered questions.   The  VA considers  social security  as                                                               
income and that  income is used toward the cost  of care for that                                                               
veteran, he said.                                                                                                               
                                                                                                                                
MR. KNOEBEL replied that it  was his understanding that the money                                                               
received over the  $800 would be available for  the veterans' own                                                               
use.                                                                                                                            
                                                                                                                                
TAPE 04-21, SIDE B                                                                                                            
Number 2371                                                                                                                     
                                                                                                                                
CHAIR WILSON commented that she  believes that the $800 figure is                                                               
what the  VA provides for  payment for a  veteran to stay  in the                                                               
home, but  that is not the  actual cost of staying  in a pioneers                                                               
home.   The cost of  staying in a pioneers'  home is quite  a bit                                                               
more than that amount.                                                                                                          
                                                                                                                                
MR. KNOEBEL asked about the age  for which a veteran could reside                                                               
at  the  home.   He  commented  that  he  knows of  a  completely                                                               
disabled veteran who is  not yet 65 years of age  and needs to be                                                               
accommodated.                                                                                                                   
                                                                                                                                
MR. DeWITT  replied that  the Pioneers'  Home System  offers very                                                               
good geriatric  care.   In this  proposal the  65-age requirement                                                               
has  been  maintained  because  the type  of  care  available  is                                                               
geriatric nature.                                                                                                               
                                                                                                                                
MR. KNOEBEL asked  for clarification that a  veteran who receives                                                               
$850 per  month in social  security benefits [which will  be used                                                               
to pay  for a  veteran to stay  in the home]  will also  have the                                                               
state reimburse the rest of the cost.                                                                                           
                                                                                                                                
MR. DeWITT responded that the lowest  cost of care in the home is                                                               
about $2,100 per  month.  So the contribution by  a veteran would                                                               
be similar to anyone else using the facility.                                                                                   
                                                                                                                                
Number 2305                                                                                                                     
                                                                                                                                
MR. KNOEBEL asked if a  veteran is currently in another pioneers'                                                               
home,  would it  be  necessary for  the veteran  to  move to  the                                                               
Palmer home to received these benefits.                                                                                         
                                                                                                                                
MR. DeWITT  replied that  under this  proposal the  veteran would                                                               
have to  be in the  Palmer home to  receive these benefits.   The                                                               
ability to house folks in other  homes that are not veteran homes                                                               
is  not  achievable  under  any   options  that  are  before  the                                                               
administration.  He explained that  there was a prior proposal to                                                               
make that option  available, but the administration  has not been                                                               
able to  bring that to fruition.   This legislation is  an effort                                                               
to put a veterans' home in Alaska, he stated.                                                                                   
                                                                                                                                
Number 2248                                                                                                                     
                                                                                                                                
CHARLIE HUGGINS, Director, Office  of Veteran Affairs, Department                                                               
of  Military and  Veterans Affairs,  testified in  support of  HB                                                               
440.   He  told the  members that  it is  important to  note that                                                               
Alaska  is the  only  state without  a veterans'  home.   In  his                                                               
conversations  with  veterans around  the  state  the number  one                                                               
topic of concern  by veterans, other than  concern about personal                                                               
medical  problems, is  the need  for a  veterans' home,  he said.                                                               
There is a  sense of delight that soon there  will be a veterans'                                                               
home  in Alaska.    It is  important to  note  that the  American                                                               
Legion,  the  Disabled American  Veterans,  and  the Veterans  of                                                               
Foreign Wars have all voted  to support the Palmer Veterans' Home                                                               
concept, he said.   There have been many hollow  promises of what                                                               
would happen and  now there is a course of  action for the Palmer                                                               
home.   Mr. Huggins emphasized  that 100 percent of  the veterans                                                               
are very  concerned about pioneers,  so the fact that  25 percent                                                               
of  the  residents  in  the  Palmer  home  will  be  pioneers  is                                                               
important.                                                                                                                      
                                                                                                                                
Number 2170                                                                                                                     
                                                                                                                                
MR.  HUGGINS shared  a  conversation  he had  at  a McDonalds  in                                                               
Juneau where a  man was concerned that his brother  would have to                                                               
move to  the veterans' home  in Palmer.   He pointed out  that is                                                               
the beauty of  this plan, in that  no one is required  to move to                                                               
other  facilities.   He thanked  the  legislature for  supporting                                                               
this plan.                                                                                                                      
                                                                                                                                
Number 2151                                                                                                                     
                                                                                                                                
CHAIR WILSON asked for clarification  that veterans can be in any                                                               
home across  the state, but the  VA will not pay  the approximate                                                               
$800 toward the veteran's care.                                                                                                 
                                                                                                                                
MR. DeWITT replied that is correct.   He explained that there are                                                               
now pioneers  who are veterans.   These individuals will  have an                                                               
option of residing in any of these homes.                                                                                       
                                                                                                                                
Number 2111                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GATTO pointed  to  the sectional  analysis of  HB                                                               
440, dated  March 22, 2004, page  3, Section 24, which  amends AS                                                               
47.55  by adding  a definition  section.   He read  the following                                                               
text:                                                                                                                           
                                                                                                                                
     The term "veteran" is defined to mean a person who has                                                                     
     not been dishonorably discharged from the armed forces                                                                     
     of the United States.                                                                                                      
                                                                                                                                
REPRESENTATIVE GATTO  said that  according to that  definition he                                                               
would  qualify even  though  he  has never  served  in the  armed                                                               
forces of the United States.                                                                                                    
                                                                                                                                
MR.  DeWITT replied  that  what Representative  Gatto  read is  a                                                               
short definition of  the bill.  He asked for  the members to turn                                                               
to page  12, lines 22 through  25.  The full  definition reads as                                                               
follows:                                                                                                                        
                                                                                                                                
     (5) "veteran"  means a person  who has  been discharged                                                                    
     from the  armed forces of the  United States, including                                                                    
     the  Alaska National  Guard or  the Alaska  Territorial                                                                    
     Guard;  the discharge  from the  armed  forces must  be                                                                    
     other than dishonorable.                                                                                                   
                                                                                                                                
Number 1962                                                                                                                     
                                                                                                                                
REPRESENTATIVE GATTO said he believes  the word "honorably" needs                                                               
to be in the definition.                                                                                                        
                                                                                                                                
MR.  DeWITT replied  that  in  working with  the  VA and  veteran                                                               
groups on the definition there  was some concern.  Originally the                                                               
definition was borrowed from other  sections of law that required                                                               
service  of 180  days and  several  other requirements.   It  was                                                               
pointed  out that  if  a  veteran were  in  for  a shorter  time,                                                               
wounded  in action,  and then  discharged, that  individual would                                                               
not be  covered.   He explained that  this definition  covers the                                                               
greatest number  of veterans  that the VA  would call  a veteran.                                                               
He  emphasized  that  the  administration  worked  with  all  the                                                               
veterans' groups to address their concerns of the definition.                                                                   
                                                                                                                                
REPRESENTATIVE  GATTO asked  how many  kinds of  discharges there                                                               
are and if there is a worse discharge than "dishonorable."                                                                      
                                                                                                                                
MR.  DeWITT  replied that  the  number  and kinds  of  discharges                                                               
depends on who  an individual is speaking with, which  is why the                                                               
definition is  worded as it  is.  He  explained that he  has been                                                               
told  that  there is  "honorable"  and  "dishonorable" [from  one                                                               
source],  but also  [from another  source] that  there are  other                                                               
honorable  discharges that  are not  dishonorable.   There was  a                                                               
general  consensus  that  as  long   as  the  discharge  was  not                                                               
dishonorable these individuals should qualify as a veteran.                                                                     
                                                                                                                                
Number 1863                                                                                                                     
                                                                                                                                
CHAIR  WILSON  commented  that she  believes  there  are  medical                                                               
discharges.                                                                                                                     
                                                                                                                                
MR. DeWITT submitted that there  is an on-going debate that those                                                               
discharges  are other  than honorable.   He  emphasized that  the                                                               
administration's intent  was to  include the  broadest definition                                                               
that  would  be allowed  by  the  VA.   He  pointed  out that  he                                                               
believes it is  important that the Alaska National  Guard and the                                                               
Alaska Territorial  Guard be included  in this  legislation since                                                               
these are  not included in  the federal definition.   Both groups                                                               
would  be   allowed  veteran   benefits,  but   without  specific                                                               
reference to the two groups they would not be included.                                                                         
                                                                                                                                
Number 1812                                                                                                                     
                                                                                                                                
CHAIR WILSON  pointed to  page 6,  lines 29 and  30, and  page 7,                                                               
lines 1  and 3.  She  explained that she received  numerous calls                                                               
from local  municipalities who were  concerned about  language in                                                               
the  bill  that refers  to  "maintenance",  but not  "operation".                                                               
With  the  decrease  in  state   funding  to  municipalities  and                                                               
decreased  revenue to  the  state there  was  concern, she  said.                                                               
Chair Wilson  said for example,  many communities have  seen less                                                               
and  less maintenance  in  harbors,  so there  is  an element  of                                                               
uncertainty.                                                                                                                    
                                                                                                                                
CHAIR WILSON moved Amendment  1, 23-GH2085\I.1, Mischel, 3/23/04,                                                               
which read as follows:                                                                                                          
                                                                                                                                
     Page 6, line 29, following "Maintenance":                                                                                
     Insert "and operation"                                                                                                   
                                                                                                                                
     Page 6, line 30:                                                                                                           
          Delete "The"                                                                                                          
          Insert "Except as otherwise provided in this                                                                          
     subsection, the"                                                                                                           
          Following "maintain":                                                                                                 
          Insert "and operate"                                                                                                  
                                                                                                                                
     Page 6, line 31 following "Sitka":                                                                                         
          Insert    ",    Anchorage,   Fairbanks,    Juneau,                                                                    
     Ketchikan, Palmer,"                                                                                                        
          Following "and":                                                                                                      
          Delete "at"                                                                                                           
                                                                                                                                
     Page 7, line 1, following "maintain":                                                                                      
          Insert "and operate"                                                                                                  
                                                                                                                                
     Page 7, line 3, following "maintained":                                                                                    
          Insert "and operated"                                                                                                 
                                                                                                                                
CHAIR WILSON explained that this  amendment would ensure that the                                                               
maintenance and  operation of the  pioneers' and  veterans' homes                                                               
would be taken care of by the state.                                                                                            
                                                                                                                                
REPRESENTATIVE COGHILL objected for purposes of discussion.                                                                     
                                                                                                                                
REPRESENTATIVE CISSNA  asked if  this amendment would  change the                                                               
fiscal  note  since  this  bill really  only  addresses  the  one                                                               
veteran home in Palmer.                                                                                                         
                                                                                                                                
Number 1727                                                                                                                     
                                                                                                                                
CHAIR WILSON  responded that this  amendment does not  change the                                                               
fiscal note.   She emphasized that she discussed  that point with                                                               
the  bill  drafter in  Legislative  Legal  and Research  Services                                                               
because  she  did   not  want  to  suggest   changes  that  would                                                               
jeopardize  the purpose  of the  bill.   Chair Wilson  added that                                                               
this language  provides clarity and  security to  the communities                                                               
who have pioneers' and veterans' homes.                                                                                         
                                                                                                                                
Number 1700                                                                                                                     
                                                                                                                                
REPRESENTATIVE  CISSNA  asked  Mr.   DeWitt  to  comment  on  any                                                               
implications this amendment might have on the bill.                                                                             
                                                                                                                                
MR. DeWITT  commented that the  administration's concern  is that                                                               
there would not  be a section inserted in the  bill that would be                                                               
internally  inconsistent.    He  said   that  as  he  reads  this                                                               
amendment he does not see  any significant difference in what the                                                               
administration is trying to accomplish.                                                                                         
                                                                                                                                
Number 1660                                                                                                                     
                                                                                                                                
REPRESENTATIVE  WOLF referred  to page  6, line  31, and  page 7,                                                               
line  1,   where  it  says,   "other  sites  designated   by  the                                                               
commissioner  of  health  and  social services."    He  asked  if                                                               
Anchorage, Fairbanks,  Juneau, Ketchikan, and Palmer  are already                                                               
designated by the commissioner.                                                                                                 
                                                                                                                                
CHAIR WILSON responded that those communities are designated.                                                                   
                                                                                                                                
MR.  DeWITT commented  that those  communities are  where current                                                               
pioneers' homes are sited.                                                                                                      
                                                                                                                                
REPRESENTATIVE  WOLF  asked  if  that  language  doesn't  already                                                               
address that portion of the amendment.                                                                                          
                                                                                                                                
CHAIR  WILSON agreed  that  it  probably does,  but  many of  the                                                               
municipalities felt  more comfortable with its  names included in                                                               
the language.                                                                                                                   
                                                                                                                                
Number 1618                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GATTO   pointed  out   that  by   mentioning  the                                                               
communities by  name it will  lock in  the state to  maintain and                                                               
operate the homes whether they are occupied or not.                                                                             
                                                                                                                                
CHAIR WILSON  responded that it  would be necessary to  come back                                                               
to the  legislature to change  the law.   She clarified  that the                                                               
communities  want   changes  to  done  through   the  legislative                                                               
process.                                                                                                                        
                                                                                                                                
Number 1572                                                                                                                     
                                                                                                                                
REPRESENTATIVE WOLF posed a  hypothetical example where residents                                                               
of the pioneers'  home in Fairbanks voluntarily  moved to Palmer.                                                               
If this  amendment passes it would  be necessary to come  back to                                                               
the legislature  to delete the  maintenance and operation  of the                                                               
Fairbanks pioneers' home from state law.                                                                                        
                                                                                                                                
CHAIR WILSON agreed with Representative Wolf's assumption.                                                                      
                                                                                                                                
REPRESENTATIVE WOLF  commented that  he has  a problem  with that                                                               
concept.                                                                                                                        
                                                                                                                                
CHAIR  WILSON said  that  she  understands Representative  Wolf's                                                               
concern.    Some of  these  homes  are old  and  may  have to  be                                                               
dismantled at some time in the  future, but she said she believes                                                               
it is important to discuss it openly as is being done now.                                                                      
                                                                                                                                
REPRESENTATIVE WOLF said he objects to Amendment 1.                                                                             
                                                                                                                                
Number 1506                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON asked  if this amendment is  in response to                                                               
the move of the ferry office.                                                                                                   
                                                                                                                                
MR.  DeWITT  commented  that  there   are  no  residents  of  the                                                               
pioneers' homes that are ferry office employees [laughter].                                                                     
                                                                                                                                
CHAIR WILSON explained that she  believes some municipalities are                                                               
concerned about  the possibility that  it might be  necessary for                                                               
them to  take over funding of  the homes, especially in  light of                                                               
the reduced revenue sharing.                                                                                                    
                                                                                                                                
REPRESENTATIVE  COGHILL commented  that  in reading  the bill  it                                                               
never  crossed his  mind that  the  state would  not operate  the                                                               
homes  as well  as  maintain  them.   He  said  he believes  this                                                               
language is somewhat redundant.                                                                                                 
                                                                                                                                
NUMBER 1441                                                                                                                     
                                                                                                                                
CHAIR WILSON reminded the members  of a comment the governor made                                                               
at the meeting  in Fairbanks when he was asked  what would happen                                                               
if the legislature does not produce  a fiscal plan.  The governor                                                               
commented  that he  would  go to  plan 2  which  named the  Sitka                                                               
Pioneers' Home  as one that would  cease to exist.   That comment                                                               
has made people nervous, she said.                                                                                              
                                                                                                                                
Number 1416                                                                                                                     
                                                                                                                                
REPRESENTATIVE GATTO said that he does  not like to see the state                                                               
being  forced to  operate and  maintain  a building  that has  no                                                               
occupants.  He said he disagrees with this concept.                                                                             
                                                                                                                                
CHAIR WILSON pointed to page 8,  lines 6 through 9, where it says                                                               
the following:                                                                                                                  
                                                                                                                                
     (e) The  department may  engage in  activities directed                                                                    
     to increase revenue from a  home.  These activities may                                                                    
     include the lease  of excess bed or floor  space, up to                                                                    
     50  percent of  the total  floor  space in  a home,  or                                                                    
     lease of space or buildings that  are not in use or are                                                                    
     underutilized.                                                                                                             
                                                                                                                                
Number 1346                                                                                                                     
                                                                                                                                
CHAIR WILSON pointed  out that this is new verbiage  that has not                                                               
been in  statute before  now.   The state  is looking  ahead, she                                                               
added.                                                                                                                          
                                                                                                                                
A roll  call vote  was taken.   Representatives  Cissna, Kapsner,                                                               
Coghill,  Seaton,  and Wilson  voted  in  favor of  Amendment  1.                                                               
Representatives  Gatto and  Wolf  voted against  it.   Therefore,                                                               
Amendment 1 was adopted by a vote of 5-2.                                                                                       
Number 1275                                                                                                                     
                                                                                                                                
REPRESENTATIVE CISSNA moved to report  CSHB 440 as amended out of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal  notes.   There being  no  objection, CSHB  440 (HES)  was                                                               
reported out of  the House Health, Education  and Social Services                                                               
Standing Committee.                                                                                                             
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Health, Education and Social  Services Standing Committee meeting                                                               
was adjourned at 4:21 p.m.