Legislature(1993 - 1994)
03/29/1994 01:00 PM CRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE March 29, 1994 1:00 p.m. MEMBERS PRESENT Representative Harley Olberg, Chairman Representative Jerry Sanders, Vice Chair Representative Con Bunde Representative Ed Willis Representative John Davies Representative Bill Williams MEMBERS ABSENT Representative Cynthia Toohey COMMITTEE CALENDAR SB 330: "An Act relating to water quality enhancement, water supply, wastewater, and solid waste grants; the Alaska clean water fund; the establishment of the Alaska clean water account, the Alaska drinking water account; and providing for an effective date." PASSED FROM COMMITTEE WITH INDIVIDUAL RECOMMENDATIONS SB 294: "An Act relating to canned salmon classics; and providing for an effective date." PASSED FROM COMMITTEE WITH INDIVIDUAL RECOMMENDATIONS *HB 502: "An Act relating mandated municipal activities or services." HEARD AND HELD OVER (* First public hearing) WITNESS REGISTER KELLY GOODE, Legislative Aide Senator Rick Halford Capitol Building, Room 111 Juneau, AK 99801-1182 Phone: 465-4958 POSITION STATEMENT: Staff to Senator Halford, Prime Sponsor of CSSB 330 KEITH KELTON, Director Division of Facility Construction and Operation 410 Willoughby Ave., 1st floor Juneau, AK 99801 Phone: 465-5180 POSITION STATEMENT: Supported CSSB 330 TERRY OTNESS, Legislative Aide Senator Robin Taylor Capitol Building, Room 30 Juneau, AK 99801-1182 Phone: 465-3873 POSITION STATEMENT: Staff to Senator Taylor, Prime Sponsor of SB 294 PATRICK WILSON, Plant Manager Icicle Seafoods P.O. Box 1147 Petersburg, AK 99833 Phone: 772-4294 POSITION STATEMENT: Supported SB 294 REPRESENTATIVE MARK HANLEY Alaska State Legislature Capitol Building, Room 515 Juneau, AK 99801-1182 Phone: 465-4939 POSITION STATEMENT: Prime Sponsor of HB 502 DANIEL MOORE, Capital Budget Officer Municipality of Anchorage 632 W. 6th Street Anchorage, AK 99519 Phone: 343-4496 POSITION STATEMENT: Supported HB 502 SCOTT BRAND-ERICKSON, Attorney Municipality of Anchorage 632 W. 6th Street Anchorage, AK 99519 Phone: 343-4496 POSITION STATEMENT: Supported HB 502 with conceptual amendments KENT SWISHER, Executive Director Alaska Municipal League 217 Second Street, Suite 200 Juneau, AK 99801 Phone: 586-1325 POSITION STATEMENT: Supported HB 502 and conceptual amendments PREVIOUS ACTION BILL: SB 330 SHORT TITLE: WATER QUALITY FUNDS AND GRANTS SPONSOR(S): SENATOR(S) HALFORD; REPRESENTATIVE(S) Mackie JRN-DATE JRN-PG ACTION 02/14/94 2834 (S) READ THE FIRST TIME/REFERRAL(S) 02/14/94 2834 (S) CRA, FIN 02/24/94 2958 (S) CRA RPT 3DP 02/24/94 2958 (S) ZERO FISCAL NOTE PUBLISHED(DEC) 02/24/94 (S) CRA AT 9:00 AM BUTROVICH RM 205 02/24/94 (S) MINUTE(CRA) 03/12/94 (S) FIN AT 10:00 AM SENATE FIN 518 03/14/94 3187 (S) FIN RPT CS 6DP SAME TITLE 03/14/94 3188 (S) PREVIOUS ZERO FN APPLIES (DEC) 03/16/94 (S) RLS AT 00:00 AM FAHRENKAMP ROOM 203 03/16/94 (S) MINUTE(RLS) 03/18/94 3268 (S) RULES RPT CS AND CAL 4DP 1NR SAME TITLE 03/18/94 3268 (S) PREVIOUS ZERO FN APPLIES (DEC) 03/18/94 3271 (S) READ THE SECOND TIME 03/18/94 3271 (S) RLS CS ADOPTED UNAN CONSENT 03/18/94 3271 (S) ADVANCED TO THIRD READING UNAN CONSENT 03/18/94 3271 (S) READ THE THIRD TIME CSSB 330(RLS) 03/18/94 3272 (S) PASSED Y15 N- E5 03/18/94 3272 (S) EFFECTIVE DATE SAME AS PASSAGE 03/18/94 3278 (S) TRANSMITTED TO (H) 03/21/94 2895 (H) READ THE FIRST TIME/REFERRAL(S) 03/21/94 2895 (H) CRA, FINANCE 03/21/94 2916 (H) CROSS SPONSOR(S): MACKIE 03/29/94 (H) CRA AT 01:00 PM CAPITOL 124 BILL: SB 294 SHORT TITLE: PETERSBURG CANNED SALMON CLASSIC SPONSOR(S): SENATOR(S) TAYLOR; REPRESENTATIVE(S) Grussendorf JRN-DATE JRN-PG ACTION 02/11/94 2788 (S) READ THE FIRST TIME/REFERRAL(S) 02/11/94 2788 (S) CRA, FIN 02/24/94 2958 (S) CRA RPT 1DP 2NR 02/24/94 2958 (S) ZERO FISCAL NOTE PUBLISHED(REV) 02/24/94 (S) CRA AT 9:00 AM BUTROVICH RM 205 02/24/94 (S) MINUTE(CRA) 03/12/94 (S) FIN AT 10:00 AM SENATE FIN 518 03/14/94 3187 (S) FIN RPT 6DP 03/14/94 3187 (S) PREVIOUS ZERO FN (REV) 03/14/94 (S) RLS AT 0:00 AM FAHRENKAMP RM 203 03/14/94 (S) MINUTE(RLS) 03/16/94 3243 (S) RULES RPT 4CAL 1NR 3/16/94 03/16/94 3244 (S) READ THE SECOND TIME 03/16/94 3245 (S) ADVANCED TO THIRD READING UNAN CONSENT 03/16/94 3245 (S) READ THE THIRD TIME SB 294 03/16/94 3245 (S) PASSED Y15 N3 E1 A1 03/16/94 3245 (S) EFFECTIVE DATE SAME AS PASSAGE 03/16/94 3251 (S) TRANSMITTED TO (H) 03/18/94 2862 (H) READ THE FIRST TIME/REFERRAL(S) 03/18/94 2862 (H) COMMUNITY & REGIONAL AFFAIRS 03/18/94 2885 (H) CROSS SPONSOR(S): GRUSSENDORF 03/29/94 (H) CRA AT 01:00 PM CAPITOL 124 BILL: HB 502 SHORT TITLE: MANDATED MUNICIPAL SERVICES SPONSOR(S): REPRESENTATIVE(S) HANLEY JRN-DATE JRN-PG ACTION 02/14/94 2382 (H) READ THE FIRST TIME/REFERRAL(S) 02/14/94 2382 (H) CRA, FINANCE 03/22/94 (H) CRA AT 01:00 PM CAPITOL 124 03/29/94 (H) CRA AT 01:00 PM CAPITOL 124 ACTION NARRATIVE TAPE 94-15, SIDE A Number 000 CHAIRMAN HARLEY OLBERG called the meeting to order at 1:06 p.m. He noted for the record Representatives Willis, Davies and Bunde were present and stated a quorum was present. Number 028 SB 330 - WATER QUALITY FUNDS AND GRANTS KELLY GOODE, STAFF TO SENATOR HALFORD, stated "By way of background, in 1987 Senator Halford sponsored by request of DEC (Department of Environmental Conservation), the Alaska Clean Water Fund. This year DEC came again to Senator Halford and asked him to sponsor the bill before you. The bill (SB 330) received one change...it's a Rules Committee substitute and it did not affect the actual bill, it affected the existing language in the law. It was a very simple change and it changed the word `guaranteeing' to the words `collateral security' on page 3, line 16. That was the only change made in the Senate from the original introduction..." Number 060 KEITH KELTON, DIRECTOR, DIVISION OF FACILITY CONSTRUCTION AND OPERATION, said "We want to thank the Senator for introducing this piece of legislation... This bill affects two statutes. It's our municipal matching grants program, which builds water and sewage treatment facilities to a 50 percent matching ratio with incorporated communities and it affects the Alaska Clean Water Fund. That is a loan program which currently provides money, primarily from the federal government, to build wastewater facilities through a loan provision, again to incorporated communities. The amendments to the loan fund are to get us positioned to take advantage of upcoming federal legislation. There's three competing bills in U.S. Congress right now which will establish a similar water loan program to the wastewater program. This amendment to our statute, if passed, would allow us to be in the position to accept and administer the federal program, assuming it's adopted this year... Basically, what both of these provisions are attempting to do, is make it easier for Alaskan communities to obtain funding for building water and sewage treatment plants. I'm talking about incorporated communities primarily, first class are the one's that have been able to take advantage of it. Some of these changes will be able to accommodate some of the larger second class communities as well." Representative Sanders joined the committee at 1:10 p.m. and Representative Williams at 1:11 p.m. MR. KELTON continued, "The actual bill has 17 sections to it. The first five sections relate to the matching grants programs. Basically we're accomplishing two things in this change. The existing statute has been around since 1972 and has been amended probably a half a dozen times for various legislative add-ons and program changes from the federal law. It's become very convoluted and redundant. So one of the major emphasis is to rewrite that and streamline it...as well as cleaning a major provision. When the bill was first adopted back in 1972, it was to address the federal EPA (Environmental Protection Agency) construction grants program that at that time provided 75 percent grant funding to communities to build wastewater facilities. The EPA program is long since history, but the provision still remains in our statutes related to that. That provision says, `State funding can be no more than half of the nonfederal participation.' So when they have 75 percent federal funding, that meant the remaining 25 was split equally between the state and local government. Since that program was now gone, we've created a set of circumstances where communities are really not interested in trying to get the federal dollars... So we are recommending that the federal limitation be taken out of the statute and say, `State money can be matched by either local or federal dollars up to any limit that they can obtain.' So they'll go out and seek as many federal dollars as they can. We think that that will actually save the state money in the long run... The other provision that we're actively looking for change on: The 50 percent matching grants provisions in this bill had been applied uniformly to all communities, regardless of size. That has posed a problem for the smaller communities. Generally, a community under 1,000 has no ability to raise the 50 percent match that's been associated with this program. So we're proposing and these percentages are strictly a starting point, anybody who wants to propose alternatives is certainly welcome to do so. We're trying to target this legislation a little closer to the governor's matching grants bill. So what we're proposing is communities under 1,000 would only have to come up with a 15 percent local match. And communities between 1,000 and 5,000 would have a 30 percent local match. Anything over 5,000, the percentage would stay the same. This would enable a lot of the smaller communities to be able to take advantage of the state's program to build their water and sewer system. The larger communities have never had a problem. The smaller communities are served by the Village Safe Water Program. There's been a group of communities between 1,000 and 5,000 that really had difficulty in financing their sanitation improvements..." Number 210 MR. KELTON concluded, "The rest of the bill starting from section 6 through 13 addresses the Alaska Clean Water Fund and...there was an existing bill passed in '87...that allowed us to take advantage of the loan program waste water facility. Basically, all we're doing now, other than some cleanup amendments under that statute, would be authorizing the state to adopt a program to administer the federal program on water supply loans should it pass this congressional session... We strongly endorse this bill as a mechanism for providing financial alternatives for funding that aren't currently available." Number 230 REPRESENTATIVE CON BUNDE asked about the specific funding sources of a water and sewer project in Kake. MR. KELTON replied, "In this particular case, they had a $500,000 appropriation from the state before they ever went and found the federal dollars. It was a $1,000,000 project and as soon as they got a half a million dollars in federal dollars, they had $250,000 from the state that they couldn't spend, so they couldn't build the project. They had to go out and obtain additional dollars or else give up the state money and in this case, they had no way of obtaining additional funds. What happened in this case, $250,000 of the state's (dollars) were reappropriated and went through the Division of Administration's matching grants program so they could match the state dollars. There's a real prohibition against seeking the federal dollars because it has always been easier to get the state dollars. We're trying to reverse that..." REPRESENTATIVE BUNDE concurred, "That trend is going to change..." Number 269 REPRESENTATIVE JOHN DAVIES asked, "Clean Water Fund, Clean Water Account, Drinking Water Fund, Drinking Water Account, could you help me understand the relationship between those"? MR. KELTON replied, "When the legislation for the Clean Water Account and fund was first established, it was the legislature's desire to establish first, a program that would allow us to use the federal dollars and that is the fund. In addition to that, it was desired by the legislature to establish a separate account that, should the legislature want to appropriate money to a loan program that went beyond the federal match requirement. And the problem with doing it all under the fund, is the constitutional prohibition against having the dedicated revenue source. We can have a dedicated fund, as long as we're doing it in compliance with the federal law. Since they wanted to go further than the federal law, and by doing that they had to set up a separate account to go further than the federal law where the interest from loan repayments would not come back to the account, but would go back to the general funds. That's the reason for having the two distinctions. All we've done in the Drinking Water portion of this is to duplicate the parallel structure that was already established under the Clean Water Account and fund. Should it be the desire of the legislature not to maintain the account provisions of this, that would be an easy matter to strike both of those provisions...(as) state dollars are probably not going to ever be available to capitalize that account anyway, so it would probably be of no major consequence if those two sections were struck. The only thing is if we were ever in a position where it wanted to be funded, you wouldn't have the mechanism to do it. It doesn't cost us anything to leave." REPRESENTATIVE DAVIES said, "So the funds are in fact dedicated funds under the authority of the federal appropriation." MR. KELTON said, "That is correct. There's approximately $62 million in the Clean Water Fund between state and federal dollars. There is nothing available currently in the Drinking Water Fund." Number 322 CHAIRMAN OLBERG asked, "Is this the money that's appropriated and generically called Village Safe Water? Is this the fund it processes through?" MR. KELTON said, "No sir, that is an entirely separate program. Village Safe Water Program are funds that come directly to the Department (of Environmental Conservation) for administration in village Alaska. These funds are primarily to benefit the larger urban communities. I should have mentioned one thing...on the loan program for the drinking water fund and account, one of the things that we see as a useful use for that money is to build water filtration systems for any place in the state that needs them. The Clean Water Act requires that all surface waters be filtered. This is posing some significant financial hardships on some of the larger seafood processing areas such as Unalaska, Kodiak, Cordova that all use surface waters. By having this loan provision available, we will be able to provide them low interest loans to comply with this unfunded federal mandate." Number 348 REPRESENTATIVE BUNDE asked, "The Alaska Clean Water Account...is that a dedicated fund and how does that mesh with the prohibition against dedicated funds?" CHAIRMAN OLBERG said, "It's a separate account. The general fund of the state of Alaska is made of probably hundreds of subaccounts." REPRESENTATIVE DAVIES pointed out, "The legislature can appropriate it for any purpose whatsoever." Number 379 REPRESENTATIVE DAVIES moved that CSSB 330 be moved from committee with individual recommendations. There were no objections. Chairman Olberg called a brief at ease from 1:26 p.m. to 1:27 p.m., when he brought forth SB 294. SB 294 - PETERSBURG CANNED SALMON CLASSIC Number 395 TERRY OTNESS, STAFF TO SENATOR ROBIN TAYLOR, PRIME SPONSOR OF SB 294, stated "We introduced this legislation at the request of the Petersburg Chamber of Commerce. The Petersburg Chamber last year implemented a `canned salmon classic' whereby the person who comes closest to guessing the number of cases packed by the canneries, wins. The chief purpose of the legislation is to allow for the promotion of Petersburg and the canned salmon industry. Receipts are used to fund the prize, of course, finance the Chamber of Commerce operations and hopefully, if this passes, with enough funds to fund a scholarship, as well. Currently, under regulation there is a 50 cent per ticket limitation on these types of affairs and this would remove this limitation. This limitation would prevent the chamber to raise the price of tickets to $2 and allow it to join other state-sanctioned classics such as the Nenana Ice Classic. Tickets would be sold throughout Southeast Alaska; it's been endorsed by most of the communities. In fact, most of the communities have agreed to allow ticket sales in their communities. And the Alaska Trollers Association supports this legislation." CHAIRMAN OLBERG asked, "You say the ticket limit is 50 cents? Doesn't the Nenana Ice Classic charge two dollars per ticket?" MR. OTNESS said, "Right. To go above that limitation you need to have this type of statutory sanction." PATRICK WILSON, PLANT MANAGER, ICICLE SEAFOODS, PETERSBURG, testified via teleconference in support of SB 294. He said, "I am also the Chairman of the Canned Salmon Classic and I'm the treasurer here of the Chamber. Last year we kicked this idea off. The main reason was to draw attention to Petersburg...and we were positively received last year... We hope this Canned Salmon Classic will draw attention to the seafood industry... We're hoping to raise funds for scholarships for graduating high school students..." Number 469 REPRESENTATIVE BILL WILLIAMS moved to pass SB 294 out of committee with individual recommendations. There were no objections. Chairman Olberg called an at ease from 1:33 p.m. to 1:35 p.m., when he brought forth HB 502. HB 502 - MANDATED MUNICIPAL SERVICES Number 486 REPRESENTATIVE MARK HANLEY, PRIME SPONSOR OF HB 502, testified saying, "Basically, what the bill does is says, `after the effective date of this act, anything that we pass on to local governments we should fund.' It's a good policy, I think, because just like the federal government keeps mandating things to us and doesn't pass on the funding, the state has a similar policy of doing it to local communities and it's easy for us to pass these things on. There are practical problems with how you actually implement it and I think it's good to get this discussion going. As a general policy, it makes a lot of sense and we've talked to the municipalities; they're supportive, I believe, of this thing because they continually see us, whether it's the senior citizen's property tax exemption, which we originally funded at 100 percent...and of course, in this year's budget, we're not funding any of it, but they still have to provide it...and there's lots of other examples. I think that municipalities just want to know that if we're going to mandate something, we're going to pay for it..." Number 508 REPRESENTATIVE DAVIES said, "Having been a former municipal assembly member, I appreciate the intent of this, but Representative Hanley indicated that there were some problems...and one of them that occurs to me is that perhaps to be able to distinguish between mandates and fundamental requirements of local government..." REPRESENTATIVE HANLEY said, "The whole intent of this was to try and get some debate going and answer some of these questions...I think some of the municipal people will be able to address some of that... I would also note with a statute as this is, it's really appropriation power that's constitutionally mandated to the legislature so it's a little bit tough on the enforcement side, even with a statute in here if we choose not to appropriate something, it may not get appropriated and there may not be recourse against the state." REPRESENTATIVE BUNDE asked the sponsor "to share your perspective of the problems that you see." REPRESENTATIVE HANLEY said, "Initially, folks had approached me to do a constitutional amendment for this and I was concerned...if we work through some of the language in the statute, it's not in the Constitution. We're not going to get required to pay for police protection...people are providing those services. So with the statute, there is more flexibility. That is the problem, trying to define or think of circumstances in the future where we might choose to mandate something that we don't want to fund... It would be any new laws enacted after this point.." REPRESENTATIVE ED WILLIS asked, "This just applies to anything in the future?" REPRESENTATIVE HANLEY replied, "It is intended to start from this point and go forward with new laws rather than try and address the incredible number of things that local communities (do)... It was an attempt to say `from this point forward, we will debate these issues one by one and say if we're going to require something then we should fund it.'" REPRESENTATIVE WILLIS said, "The Senior Citizen Property Tax Exemption: If, for example, suppose the legislature after the enactment of this particular law decided to lower the caps to reduce the funding to this program, would the fact that we changed the caps then put that amended legislation under the umbrella of this particular bill"? REPRESENTATIVE HANLEY said, "It says, `A law enacted that requires a municipality to perform a new activity or service' and I would think that would be covered, `or increase the level of any activity or service.' So, if you were lowering the cap, that would I think, be a reduction of the responsibility..." Number 596 REPRESENTATIVE BUNDE pointed out, "Should we suddenly establish a new city, then how (would) the traditional services (yet to be provided) fall under this bill"? REPRESENTATIVE HANLEY replied, "If somebody chooses to incorporate then they come under the current mandates that are already in the statutes so they would also be required to fulfill whatever level of service, just like these cities that are already providing that, that would be the current law. It's not based on a new city coming into effect, it's based on the legislature passing a new law to add something else to any community... It's not going to exempt things that have already happened...it's a problem. It seemed easier to force the debate into the future, one by one, as we passed new laws..." CHAIRMAN OLBERG said, "I don't know how it could be any clearer that we're not going to change anything that's happened historically. We're going to act differently after the effective date of this legislation as far as the state's relationship with municipalities." DANIEL MOORE, CAPITAL BUDGET OFFICER, MUNICIPALITY OF ANCHORAGE, testified via teleconference in support of HB 502. He said, "The municipality, of course, has been experiencing quite a few mandates, mostly from the federal level in the past. There are state mandates...that have negatively impacted the municipality. Our primary concern is...the potential escalation of unfunded state mandates in the future which would probably be caused as a result of the state trying to deal with declining revenues... State mandates as defined within the language of HB 502 constitutes any law to provide a new activity or service. We believe that mandates aren't necessarily bad, however, when they go unfunded or when there's no agreement to participate in the funding. We believe the municipality is forced to give artificially high priority to these mandates. As a result of having unfunded mandates, there's an artificial high priority, takes priority over basic services. A municipality must still pay for these out of increased taxes or, if the funds are not available, services are then cut. The municipality believes that as the state struggles to balance its budget now...the practice of burdening local governments with unfunded mandates will increase. The legislature therefore needs to pass legislation similar to HB 502 in a timely manner so that future legislatures will be discouraged from unfairly burdening local government. Attached with our testimony is a list of actual unfunded mandates that have occurred in the past..." (A copy of this list may be found in the House Community and Regional Affairs Committee Room, Capitol Room 126, and after the adjournment of the second session of the 18th Alaska State Legislature, in the Legislative Reference Library.) MR. MOORE continued, "HB 502 is designed to have an effective date for future mandates. At this time the municipality would just like to encourage legislatures to still work on addressing past unfunded mandates, especially the senior citizen's property tax exemption. Our position is either to provide full funding for it or to at least give the municipalities the option of opting out of the program... This particular example of an unfunded state mandate is the municipalities greatest example of the degree to which the state has forced local government to provide funding for mandate... On a final note...there's about four points that the municipalities' Department of Law has brought up... One is being the way we define the word `law' in the bill... Another, deals with who with the state would actually administer this type of law. And in addition, there's other issues in terms of how it gets funded from year to year..." Number 709 REPRESENTATIVE DAVIES said, "I'm still trying to understand if we can differentiate between what might be called fundamental requirements of local government versus mandated additional requirements that the state government might put on top of that." TAPE 94-15, SIDE B Number 000 REPRESENTATIVE DAVIES referred to the list provided by the Municipality of Anchorage. (A copy of this list may be found in the House Community and Regional Affairs Committee Room, Capitol Room 126, and after the adjournment of the second session of the 18th Alaska State Legislature, in the Legislative Reference Library.) He pointed out, "Equipment and staff time to monitor chlorine levels in pools: This would be public swimming pools and spas... They don't require that you operate pools, but they require that if you operate a pool that you do it in a safe manner. Can you comment on that kind of a distinction? That's kind of a second order mandate, in my view." SCOTT BRAND-ERICKSON, ATTORNEY, MUNICIPALITY OF ANCHORAGE, testified via teleconference, "Your questions can be answered in a similar fashion. Other states have by constitutional provision or statute, set out limitations on mandates. Two examples, Massachusetts and California have extended programs in the past classifying whether a particular service is a fundamentally local government requirement or a new mandate or with the pool example...and the suggestion that we would have is, we don't actually know a quick way to answer all of these questions because they tend to depend upon the facts and the particular service. Something that California did that we think would be helpful would be, if there is either by in the statute or by regulation work by one of the administrative departments that can set up the rules for deciding what is a new service, what is an increase in level of service and to differentiate what is something that the local government is deciding to do itself." REPRESENTATIVE DAVIES asked if Mr. Brand-Erickson had the language from California and for the committee to receive it. MR. BRAND-ERICKSON said he would retrieve it for the committee. REPRESENTATIVE BUNDE asked, "In line 6 of the bill...how would that affect cost sharing? Would you read this to say the state would, should pay a hundred percent or fifty percent"? CHAIRMAN OLBERG said, "If the statute says `we'll give you half the money to do this if you want to' and you choose to do it, it's no longer a mandate perhaps." Number 112 KENT SWISHER, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL LEAGUE, testified in support of HB 502. He said, "We continue to be very concerned with this one and appreciative of the legislation. Having been party to this kind of debate in other states and at the national level...I guess I would say that we would regard HB 502 probably as more of a statement of legislative policy than a barrier of future enactments... I think the fact that one would have to go to court to implement the provisions of HB 502, would tend to militate against local jurisdictions using it in a frivolous way because it's not a free procedure... One thing you might want to do as a part of strengthening the process, is strengthen the fiscal note process that you have currently in place. Right now that process doesn't kick in until we're awfully late in the game..." REPRESENTATIVE DAVIES said, "I take it what you're suggesting here is that somehow the fiscal note process would explicitly be required to take note of fiscal impacts on the municipalities." MR. SWISHER confirmed this. CHAIRMAN OLBERG suggested a process in which municipalities could submit fiscal notes. REPRESENTATIVE DAVIES said, "I wonder if Mr. Swisher might comment on what I call the second order mandate. The situation where the state might require a municipality when they engage in some optional activity, like operating a swimming pool, that they operate it safely... Those things certainly mandate some costs on your part...but that's something you decide when you choose to operate the pool. Could a distinction like that be made that would eliminate that class of thing from this bill"? MR. SWISHER said, "That would take some work with the language. I think probably it could be. At least in my mind there exists a fairly clear distinction between such things as the capital matching grant program which might require a mandate, a match from us only if we choose to participate in it. So we don't consider it a mandate. Then there are a series of things that get further and further away from clarity... I think that the impracticality of pursuing compensation for a relatively minor mandate and one that normal people might think is probably part of what we ought to do anyway would be difficult, expensive and unsuccessful." Number 244 REPRESENTATIVE DAVIES said, "I can offer perhaps a more expensive second order mandate: The operation of a municipal landfill. The state regulations on that can be fairly expensive and yet they can be equally important to public health." MR. SWISHER concurred and said, "In some part in that we are into what I would call a pass through mandate because often we're dealing with mandates from the federal government which the state is mandatorily implementing. I would think that we could find some language that...would do that, the kind of things you're thinking about..." CHAIRMAN OLBERG reminded the committee, "I think the key element is that we don't have to address anything we're already doing, but we would certainly have to craft statutes more carefully in the future to take all of these things into consideration and there would have to be some way to address federal mandates..." Number 280 REPRESENTATIVE DAVIES asked, "That's the question: ...Under this bill, would we be required to pick up the cost of federal mandates that are supposed to be passed through to municipalities." CHAIRMAN OLBERG said, "Under the wording of this bill, probably, I'd say, yes..." REPRESENTATIVE DAVIES said, "It seems to me that we might be able to address this issue by trying to define what I would call... a fundamental mandate, or clear mandate and what I would call a second order mandate... Perhaps we could define two categories of mandate and the law could require that we place any new law in one of those two categories and that would force the debate on whether this was an unfunded mandate...or some other category..." Number 320 CHAIRMAN OLBERG offered to reschedule HB 502 for "next week" so the committee could "reflect" on the bill. ADJOURNMENT CHAIRMAN OLBERG adjourned the meeting at 2:12 p.m.