Legislature(1993 - 1994)
03/16/1993 08:00 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 65: FINANCIAL ADMINISTRATION OF STATE GOVT. TAPE 93-29, SIDE B Number 010 CHAIRMAN VEZEY called the committee back to order at 8:56 a.m. and read the title to CSHB 65. He stated his intention to go through the bill section by section with the committee, and began with sections one to 32, which dealt with the liquor industry. Number 050 CHERYL FRASCA, DIVISION DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF MANAGEMENT AND BUDGET (OMB), explained the OMB's role as the facilitator of the Governor's original version of CSHB 65. She stated the bill was designed to save money by making most licenses biennial, which would cut down on the bureaucracy, and also to allow several departments the right to set fees for licenses, inspections, and certificates. Number 067 CHAIRMAN VEZEY noted the omission of a termination date for late applications for liquor licenses in Section 58, paragraph c, line 15, and asked if that was an oversight. Number 091 MS. FRASCA stated she did not know but would confer with the Department of Law. She stated the law was only for transition from the old statues to new. Number 108 CHAIRMAN VEZEY stated CSHB 65, as written, seemed to modify AS 4.11.270, and asked Ms. Frasca to inquire about the omission. Number 150 MS. FRASCA agreed to comply and stated she was at the committee's disposal to answer questions. Number 170 CHAIRMAN VEZEY asked committee members to look CSHB 65 over to see what questions they might have pertaining to sections one to 32. There were none. Number 178 CHAIRMAN VEZEY directed the committee's attention to sections 32 through 36, dealing with the public guardian statutes in Title 13. He had no questions, but considered it a major change in the law. Number 190 MS. FRASCA explained the Office of Public Advocacy (OPA) is currently part of the Department of Administration, and CSHB 65's changes would allow the OPA to charge for guardian services on the basis of ability to pay. CHAIRMAN VEZEY noted CSHB 65 also gave the OPA the right to appoint public guardians, currently a court duty. Number 216 MS. FRASCA said the authority to provide public guardians came through the court, but OPA had already undertaken the duties. She stated the repealed sections only dealt with the allocation of costs of a public guardian, not the authority of who assigned them. Number 240 CHAIRMAN VEZEY directed the committee to sections 36 through 43, which dealt with student loan guarantees. He stated the sections generally created a loan guarantee fee as part of the cost for a student loan. Number 259 REPRESENTATIVE ULMER asked why such a fee might be needed since current figures showed collections were up, and defaults down. Number 276 MS. FRASCA explained about $900,000 dollars from student loans had to be written off in 1992 due to death, bankruptcy or disability, and the fees would be used to cover those losses. She estimated the fee would provide about $513,000 per year against such losses. Number 290 CHAIRMAN VEZEY announced an upcoming committee substitute he planned to submit would delete increases in the student loan fee. He then directed the committee to section 44, which addressed the Department of Labor, giving the Department authority to set fees for examinations and administering applications for professional inspectors. He noted the upcoming committee substitute would also delete the fees. Number 321 REPRESENTATIVE ULMER asked why the fees would be eliminated. Number 323 CHAIRMAN VEZEY said allowing such fees by regulation fell into the area of giving the Department regulatory powers. Number 326 REPRESENTATIVE ULMER contended charging for inspections would not be regulatory. CHAIRMAN VEZEY disagreed, saying the ability to write regulations on fees would be regulatory. Number 330 REPRESENTATIVE ULMER asked what kind of fee generation the Department might see, and what would happen if the Department was not allowed to impose such fees. MS. FRASCA stated the fee was $400 to administer boiler pressure vessel exams, as opposed to no charge currently. She stated further that the OMB currently charged for most professional groups, and that institution of this charge would bring them in line with other professions. Number 335 REPRESENTATIVE ULMER asked if there was any justification for not charging the fee. MS. FRASCA said she had no idea. Number 337 DONALD G. STUDY, ACTING DIRECTOR, DIVISION OF LABOR STANDARDS AND SAFETY, DEPARTMENT OF LABOR, said the Department's budget had been cut over the last three years, and wished to fund the system with program receipts. Number 340 CHAIRMAN VEZEY noted the changes in CSHB 65 meant changing fees by regulation as opposed to changing fees by statute, and the legislature had no oversight powers to repeal regulations unless a proposed constitutional amendment was passed. Number 350 MR. STUDY stated those regulations underwent legislative review. Number 353 CHAIRMAN VEZEY stated the legislature could review such regulations, but had no oversight powers. Number 360 REPRESENTATIVE BETTYE DAVIS asked why the Department wanted to go from statutory to regulatory changes on fees. Number 363 MR. STUDY stated it was to reflect true costs of licenses, regulations and inspections. Number 367 REPRESENTATIVE B. DAVIS asked if that was not the case now. Number 370 MR. STUDY explained that was not the case in several instances, and the allowance of fees by regulation would also eliminate peaks and valleys in program receipts, and stabilize the revenues from them. Number 388 MS. FRASCA stated CSHB 65 reflected the frustration of having to pass rate increases through statues, which she said was inefficient. She said CSHB 65 cleared the way to update fees easily. Number 402 JOE RYAN, COMMITTEE AIDE TO CHAIRMAN VEZEY, noted CSHB 65 allowed a broadening of scope for license fees to be regulated, and gave an example of a fee structure under the Department which would increase the professional fees almost immediately. REPRESENTATIVE ULMER stated the debate was more about philosophy than setting fees, and stated supporting user fees made sense. She also stated those who used a service and benefitted should pay. Number 420 CHAIRMAN VEZEY stated the debate was not about user fees, but rather who got to set them: The people running the department or the legislature. He then directed the committee to read through section 53, and called for comments on the catastrophic reserve account. Seeing none, he stated the upcoming committee substitute he planned would eliminate the provisions for the account. He then directed members to the section allowing the DNR to set user fees for state parks, and announced his committee substitute would also delete this reference. Number 462 REPRESENTATIVE ULMER stated Alaska's parks were used by far more people than those in the Lower 48, and not allowing the DNR to charge users for their services would lead to a deterioration of the parks. She stated removing such authority was a mistake. Number 466 CHAIRMAN VEZEY stated he did not intend to remove the authority to charge fees, but rather to prevent them from being set by regulation. Number 480 REPRESENTATIVE ULMER stated it was impractical for the legislature to address fees every year for every department, and by forcing them to do so would cause the parks to deteriorate, since legislators might put off such increases. Number 485 CHAIRMAN VEZEY reiterated the status of a constitutional amendment to allow regulations to be repealed by the legislature, and stated that must be passed before allowing departments to set such fees. He then directed the committee to section 54, which allowed the Department of Environmental Conservation (DEC) to set regulatory fees, and also gave the DEC broader powers. He stated the upcoming committee substitute would delete this section. CHAIRMAN VEZEY also noted section 55 dealt with air quality, and stated consideration of this section would be inappropriate until the legislature's study of air quality was completed. He then noted sections 56 through 58 were housekeeping measures, which generated no comment from members. Number 537 MS. FRASCA noted the sections simply provided a regulatory bridge between the old statutes and the new. ADJOURNMENT Number 556 CHAIRMAN VEZEY then introduced the House State Affairs CS to CSHB 65, and seeing no comment or testimony, adjourned the meeting at 9:31 a.m.