Legislature(1993 - 1994)

1993-01-15 House Journal

Full Journal pdf

1993-01-15                     House Journal                      Page 0075
HB 65                                                                        
HOUSE BILL NO. 65 by the House Rules Committee by request of                   
the Governor, entitled:                                                        
"An Act relating to the improvement of state finances through                 
reduction of operating costs of certain state agencies and                     
establishment of certain fees; and providing for an effective date."           
was read the first time and referred to the Labor & Commerce, State            
Affairs, Judiciary and Finance Committees.                                     
The following fiscal notes apply:                                              
Fiscal notes (2), Dept. of Environmental Conservation, 1/15/93                
Fiscal notes (2), Department of Health & Social Services, 1/15/93             
Fiscal note, Dept. of Labor, 1/15/93                                          
Fiscal note, Dept. of Natural Resources, 1/15/93                              
Fiscal note, Dept. of Public Safety, 1/15/93                                  
Fiscal note, Dept. of Administration, 1/15/93                                 
Revenue note (2), Dept. of Education, 1/15/93                                 
Revenue note (2), Dept. of Labor, 1/15/93                                     
Revenue note, Dept. of Public Safety, 1/15/93                                 
Zero fiscal notes (3), Dept. of Administration, 1/15/93                       
Zero fiscal note, Dept. of Labor, 1/15/93                                     
Zero fiscal note, Dept. of Revenue, 1/15/93                                   
The Governor's transmittal letter, dated January 15, 1993, appears             
"Dear Speaker Barnes:                                                          
Under the authority of art. III, sec. 18, of the Alaska Constitution, I am     
transmitting a bill relating to the improvement of state finances by           
reducing costs in the operations of certain state agencies and                 
authorizing state agencies to defray a greater portion of their costs          
through the imposition of fees.  A section-by-section description of this      
bill follows.                                                                  
Sections 1 - 32 of the bill authorize biennial renewal of liquor licenses      
by the Alcoholic Beverage Control Board.  Under this bill, all liquor          
licenses that are now issued for a one-year period would be issued for         
a two-year period.  As a result of the transitional procedures in sec. 71      

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HB 65                                                                        
of the bill, each year only one-half of the licenses would be subject to       
renewal.  The board's staff now labors under a staggering amount of            
renewal-related work.  The effect of the bill would be to spread that          
Sections 33 - 35, 49, 64, and 70 (repealer of AS13.26.410(b)) relate           
to the duties of the Office of Public Advocacy.  The bill proposes to          
delete certain functions of the Office of Public Advocacy (OPA) that           
are considered to be duplicative of services provided by other agencies        
or that are not constitutionally mandated.  Due to the increase in child-      
in-need-of-aid cases, it is crucial that the many abused and neglected         
children receive priority in OPA appointments.                                 
Sections 33 - 35 of the bill would allow the Department of                     
Administration to determine a schedule of reasonable fees for the costs        
of providing public guardians.  The Office of Public Advocacy would            
be allowed to assess these fees against the estate or income of a ward         
or protected person for whom a guardian has been appointed, based on           
the financial ability on the ward or protected person to pay these costs.      
Currently, no fees may be assessed against any person receiving the            
benefit of a public guardian except upon approval by a court.  This            
process is cumbersome and expensive for the Office of Public                   
Advocacy, which must pay for the costs of a court hearing, including           
the costs of counsel for both sides.  These changes would simplify the         
procedure for recouping some of these costs, and would provide for             
consistent application of the fee schedule, while allowing an exemption        
forwards or protected persons who are not financially able to pay the          
Section 49 of the bill would amend AS25.24.310 to delete the                   
requirement that OPA provide guardian ad litem representation in               
certain child custody proceedings.  Currently, the Alaska court system         
has personnel denoted as "custody investigators" who perform                   
essentially the same function as OPA in custody proceedings.                   
Section 64 of the bill would amend AS44.21.410(a), regarding the               
powers and duties of OPA, to correspond to the amendments made by              
secs. 33 - 35 of the bill.  Additionally, this section would eliminate the     
requirement that OPA provide free attorney representation to parents           
whose children are involved in the disposition phase of delinquency            
proceedings, and the requirement of free representation in cases               

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HB 65                                                                        
involving adoption of a minor, a petition to remove the disabilities of        
a minor, or a commitment proceeding involving a minor.                         
Section 69 of the bill would delete the requirement that OPA represent         
minors in commitment proceedings, to correspond to one of the                  
amendments to AS44.21.410(a)(4) made by sec. 64 of the bill.                   
Section 70 would repeal AS13.26.410(b), for consistency with the               
amendments proposed by secs. 33 - 35.                                          
After the effective date of the sections relating to OPA in this bill,         
OPA would not accept new appointments for the types of cases deleted           
from OPA's mandate by the bill.  However, OPA would continue to                
represent those parties in cases to which OPA was appointed before the         
bill's effective date.                                                         
Sections 36 - 38 would authorize the Alaska Commission on                      
Postsecondary Education to assess a one percent guarantee fee on               
student loan awards made under the Scholarship Loan Program,                   
effective July 1, 1994.  These fees would be deposited into a loan             
guarantee fee account within the student loan fund and would be used           
to offset losses incurred due to student loan debt cancellation                
necessitated by death, disability, or bankruptcy of the student.  The          
current statute does not allow security to be required for a loan and          
strictly limits the use of loan proceeds.  These amendments also would         
provide that the loan guarantee fee be added to the loan award so that         
students would receive the full amount of money requested, up to the           
maximums set out in AS14.43.110 and 14.43.115, to pay for their                
Sections 39 - 43 would authorize the same one percent loan guarantee           
fee to be assessed on loans under the Memorial Scholarship Loan                
Program, the Teacher Scholarship Loan Program, and the Family                  
Education Loan Program.  As a result, all of the student loan programs         
would assess a one percent loan guarantee fee on the amount of the             
loan awarded.                                                                  
Section 44 would establish in the Department of Labor the authority            
to set reasonable fees by regulation for administering special inspector       
examinations and processing applications for special boiler and                
pressure vessel inspector commissions.  Currently the department does          

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HB 65                                                                        
not charge a fee for processing these applications for administering the       
Section 45 would eliminate the requirement in AS18.62.020 that                 
certificates of fitness for plumbers and electricians be valid for either      
a one-year or a three-year period.  Under the bill, the Department of          
Labor would have the authority to set a time period in regulation for          
the certificates.  This should increase the department's efficiency in         
processing applications for these certificates and stabilize program           
Section 46 would eliminate the current statute's prescribed certificate        
of fitness fees for plumbers and electricians, and instead would               
establish authority in the Department of Labor to set reasonable fees          
by regulation.  See AS18.62.030.  This section would also allow the            
department to charge a fee for duplicate certificates.  These changes          
would enable the department to set fees for certificates of fitness in         
line with the actual costs incurred in issuing them, and would authorize       
the department to recoup expenses incurred in issuing 100 - 150                
duplicate certificates each year.                                              
Section 47 is a revenue-generating measure that would permit the               
Alaska Police Standards Council to adopt regulations to collect                
reasonable fees for processing applications for state certification of         
police and correctional officers and instructors who are employed by           
non-state agencies.                                                            
Section 48 would raise the required fee for filing an application for an       
employment agency permit under AS23.15.390 from $10 to $100.                   
This higher amount reflects the costs of the review done by the                
Department of Labor for these permits.                                         
Sections 50 - 57 would amend AS28 (motor vehicles) to enhance                  
revenue through increased motor vehicle fees or to correct technical           
problems in the motor vehicle laws to increase the efficiency of the           
Department of Public Safety.                                                   
Section 50 would delete the phrase "vehicle register" in                       
AS28.10.071(a), which no longer is meaningful in light of current              
computer technology.  In addition, this section would clarify the              
authority of the department to adopt regulations to recover the state's        

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HB 65                                                                        
costs in generating computerized vehicle registration lists.                   
Section 51 would amend AS28.10.181(c) to permit the issuance of                
special request license plates depicting Alaska wildlife and other             
images of life in Alaska.  This change would produce revenue through           
the issuance of these special request plates.                                  
Section 52 changes the eligibility for free vehicle registration and           
license plates for disabled persons by adopting the definition of limited      
or impaired ability to walk that appears in a federal regulation               
(23C.F.R. 1235.2).  The special license plate allows the holder to have        
special consideration for designated parking for the disabled.  The            
existing statute (AS28.10.181(d)) allows a person with at least a 70           
percent disability or medical handicap to obtain vehicle registration at       
no charge, and, through the free special license plates, to use the            
designated parking even though the person may not have a disability            
that affects walking.  The new definition would provide for free               
vehicle registration and license plates to those most in need of special       
parking.  The department should receive additional revenue from                
vehicle registration fees and the sale of regular license plates to those      
who no longer qualify under AS28.10.181(d).                                    
Section 53 clarifies an ambiguity in AS28.10.181(j) by explicitly              
requiring that car dealers use two dealer plates on each vehicle               
permitted to have dealer plates (all license plates are issued in pairs).      
The somewhat confusing language of the existing statute has allowed            
some dealers to split a pair of plates between two vehicles.  The              
Department of Public Safety should receive increased revenue through           
the sale of additional plates to dealers.                                      
Sections 54 and 58, and the repeal of AS28.10.011(12) in sec. 70,              
together make clear that mobile homes are not considered "vehicles"            
for purposes of administering motor vehicle laws.  Under the changes           
made by these sections, the Department of Public Safety, division of           
motor vehicles, will no longer provide registration and motor vehicle          
titles for mobile homes.                                                       
Section 55 would clarify that senior citizens are entitled to free vehicle     
registration of only one vehicle once each calendar year.  This change         
is needed in order to avoid significant difficulties and administrative        
costs encountered in maintaining proper registration when senior               

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HB 65                                                                        
citizens buy, sell, or trade vehicles during the year and claim free           
registration on more than one vehicle during the year.                         
Section 56 provides an additional registration fee of $10 for vehicle          
registration not done by mail.  This section would provide an incentive        
for people to use the mail for vehicle registration.  This should              
alleviate some of the delays that most people are encountering at              
division of motor vehicle field offices and allow DPS staff to function        
more efficiently.  This section also allows the department to adopt            
regulations to waive the additional fee in appropriate circumstances.          
Section 57 would clarify AS28.10.421(c) by requiring that companies            
and businesses that register vehicles in their company or business name        
must pay commercial registration fees, and cannot avoid paying those           
fees by claiming that the vehicle is not used for commercial purposes.         
Section 59 exempts money that the state receives for administering the         
group insurance programs established under AS39.30.090 (primarily              
health insurance programs) from the definition of "program receipts"           
in AS37.05.146.  This change will result in accounting efficiencies            
being saved in the Department of Administration's ongoing operations           
and cost-savings to the state.                                                 
Sections 60 and 61 of the bill amend AS37.05.289, the State                    
Insurance Catastrophe Reserve Account (Account), by providing that             
payments to the state of insurance claim settlement money and money            
received by the state as recovery for losses, are to be deposited directly     
into the Account (which is in the general fund).  Presently, such money        
that is received by the division of risk management must be credited           
to the general fund and is appropriated to the state agency to which the       
payment is related.  The United States Department of Health & Human            
Services' division of cost allocation has determined that certain              
insurance recovery money must be returned to the Account (from                 
which federally funded state agencies have been charged premiums               
through division of risk management "Cost of Risk" allocations).  The          
federal government demands that a portion of such insurance                    
recoveries be refunded to the appropriate federal program.                     
By allowing for insurance settlement and claims recovery money to be           
deposited directly into the state insurance catastrophe reserve account,       
future premium assessments are expected to be reduced and the state            

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HB 65                                                                        
will be in compliance with federal cost allocation standards.  An              
appropriation would still be required before expenditure of money in           
that account.  Additionally, the new procedures should reduce the              
considerable accounting required with the present system.                      
Section 62 would clarify the authority of the Department of Natural            
Resources to accept cash or other donations to support the system of           
state parks and recreational facilities.                                       
Section 63 would expand the authority of the Department of Natural             
Resources to collect reasonable fees for services provided in state            
parks.  It would add several new categories of park fees, including sale       
of firewood, sale of park-related merchandise, entrance fee into visitor       
centers and historic sites, sale of plans and graphic materials, day use       
fees, and fees for park-related programs.  The bill, in sec. 71, also          
would set a temporary fee schedule for certain of these services, to be        
used until the Department of Natural Resources sets the fees by                
regulation.  In the fourth year of a phased implementation schedule,           
these new fees are expected to raise around $400,000.                          
Sections 65 and 66 of the bill would amend, and add a new subsection           
to, AS44.46.025 to provide the Department of Environmental                     
Conservation (DEC) with increased authority to charge fees to offset           
the direct costs of various programs designed to avoid and rectify             
pollution, to ensure healthy and safe public facilities, and to assist         
business in complying with local, state, and federal environmental             
standards.  An existing statute presently limits DEC's authority to            
charge fees to certain enumerated subject areas, and further limits            
DEC's fee authority to specified services related to those subjects.           
Thus, DEC may charge a fee to reflect the costs associated with the            
issuance of a permit for a hazardous waste facility, but may not charge        
a fee when a permit is not issued (either because the application is           
withdrawn or a permit is determined not to be necessary), even though          
DEC incurs costs in reviewing the application.  This results in the            
permitted facilities shouldering an inequitably large share of the cost        
of the hazardous waste management program.                                     
Section 65 would rectify this problem in several ways.  First, it would        
amend the introductory clause of AS44.46.025(a), to allow DEC to               
charge fees for any services relating to the programs listed in (a), not       
just the underinclusive listing of activities now set out in the law.  This    

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HB 65                                                                        
amendment recognizes that DEC employs methods other than permits               
and inspections in its activities.                                             
Second, through sec. 65, the itemized list of programs in the subsection       
would be modified and expanded, to allow the DEC to charge fees                
reflecting the direct costs of: (1) management of hazardous waste, not         
just permitting costs; (2) approvals of sites for hazardous waste              
management facilities; (3) control of solid waste facilities, and permits      
for those facilities, including wetlands permits (assuming state               
assumption of the wetlands permitting process that is currently handled        
by the United States Army Corps of Engineers); (4)  reviews of                 
sewage and industrial waste disposal or treatment plans; (5) oversight         
of the application of pesticides and broadcast chemicals; (6) inspection,      
testing, or other regulation of a wider variety of service facilities; (7)     
certification of private laboratories that will conduct a variety of           
environmental analyses for profit; (8) state testing for and issuance of       
certificates of inspection for motor vehicles; (9) certification of federal    
permits or authorizations under the federal Clean Water Act; and (10)          
filing of information with the Alaska State Emergency Response                 
Section 66 would revise the existing fee language relating to the air          
quality permit program, removing it from AS44.46.025(a) and placing            
it in a new subsec. (c) of AS44.46.025.  This new subsection                   
authorizes DEC to set fees for program services to cover indirect costs        
of the program, as well as direct costs.  This change is incorporated in       
the bill because air quality permit program fees must reflect both             
indirect and direct costs to meet requirements of the federal Clean Air        
Section 67 would amend AS47.07.020(b) to add a new category of                 
persons to the state's optional list of those eligible for federal Medicaid    
coverage.  Through the amendment, the state could claim federal                
matching money for medical costs now paid entirely from state money.           
Children under age 21 who are eligible for adoption assistance under           
AS25.23.190 - 25.23.220 because of special medical or rehabilitative           
needs would be added to the optional Medicaid-eligible list under this         

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HB 65                                                                        
Section 68 would amend AS47.07.035, which lists the order of                   
priority in which groups eligible under the optional Medicaid program          
will be eliminated from Medicaid coverage when there are insufficient          
appropriations to cover all optional services and groups.  This bill           
would add, as para. (28) in this list, persons under age 21 who are            
eligible for adoption assistance due to special medical or rehabilitative      
needs.  Placement of this group as number 28 would mean that this              
group would be the last to be eliminated for Medicaid coverage in the          
event of a shortfall of appropriations.                                        
Section 70 repeals certain provisions of Alaska law.  AS13.26.410(b)           
would be repealed to make a necessary conforming amendment to                  
facilitate the collection of fees by OPA as set out in secs. 33 - 35 of        
this bill.  AS28.10.011(12) is repealed to remove a reference to               
mobile homes from AS28, as described earlier in this letter.                   
AS28.10.181(k) is repealed to allow the Department of Public Safety            
(DPS) to no longer register vehicles that are only occasionally used on        
a highway.  This repeal should reduce the workload for DPS, as well.           
AS28.22.011(a)(3) is repealed to make a technical amendment to                 
mandatory motor vehicle insurance to conform to the repeal of                  
AS28.10.181(k), relating to occasional used vehicles.  Finally,                
AS37.05.210(1) is repealed to remove the statutory requirement for             
the Department of Administration to make monthly and annual reports            
on the financial condition and transactions of funds in the state              
accounting system.  The department currently prepares these reports by         
computer on a more frequent basis.  The repeal would leave intact the          
Department of Administration's responsibility to file a year-end report        
on the financial condition of the state, including financial transactions      
from the preceding fiscal year.                                                
Section 73 would give transitional authority to allow state agencies to        
begin the process to adopt regulations as soon as the bill is signed into      
law, so long as the new regulations do not become effective before the         
respective effective dates of the relevant sections of this bill.  Section     
74 of this bill would give this section an immediate effective date.           
Section 74 also would provide an immediate effective date for the              
transitional sections related to temporary fees in state parks and             
staggered expiration of licenses issued by the Alcoholic Beverage              
Control Board.                                                                 

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HB 65                                                                        
Section 75 would provide a July 1, 1993 effective date for the majority        
of sections of the bill to coincide with the start of state fiscal year        
Section 76 would provide an effective date of December 31, 1993 to             
allow a uniform date for the changing from annual to biennial licenses         
issued by the Alcoholic Beverage Control Board.                                
Section 77 would give secs. 36 - 43 of this bill an effective date of          
July 1, 1994 to allow the Alaska Commission on Postsecondary                   
Education to institute the uniform fee assessment for the 1994 - 1995          
academic year.                                                                 
I urge your favorable consideration of this bill.                              
           Walter J. Hickel