Legislature(1993 - 1994)
03/31/1993 08:40 AM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
March 31, 1993
8:40 a.m.
TAPE HFC 93-84, Side 1, #000 - end.
TAPE HFC 93-84, Side 2, #000 - #561.
CALL TO ORDER
Co-Chair Larson called the House Finance Committee to order
at 8:40 a.m.
PRESENT
Co-Chair Larson Representative Hoffman
Co-Chair MacLean Representative Martin
Vice-Chair Hanley Representative Navarre
Representative Brown Representative Parnell
Representative Foster Representative Therriault
Representative Grussendorf
ALSO PRESENT
Mike Greany, Director, Legislative Finance Division;
Representative G. Phillips; Larry Meyers, Director, Excise
and Income Audit, Department of Revenue; Don Valesk, Local
71; Kent Swisher, Alaska Municipal League; Jeff Ottensen,
Department of Transportation and Public Facilities; Irene
Morris, Alaska Environmental Lobby; Darrel J. Rexwinkel,
Commissioner, Department of Revenue.
SUMMARY INFORMATION
HB 1 "An Act relating to motor vehicle registration;
and providing for an effective date."
CSHB 1 (CRA) was reported out of Committee with
"no recommendation" and with a fiscal impact note
by the Department of Public Safety, and with a
zero fiscal note by the Department of
Environmental Conservation and with a fiscal
impact note by the Department of Transportation
and Public Facilities, dated 3/22/93
HB 58 "An Act relating to the budget reserve fund
established under art. IX, sec. 17, Constitution
of the State of Alaska."
HB 58 was HELD in Committee.
HB 96 "An Act extending the termination date of the
Alcoholic Beverage Control Board."
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HB 96 was reported out of Committee with a "do
pass" recommendation and with a zero fiscal note
by the Department of Revenue, dated 3/26/93.
HB 135 "An Act making supplemental and special
appropriations for the expenses of state
government; making, amending, and repealing
capital and operating appropriations; and
providing for an effective date."
HB 143 was HELD in Committee.
HOUSE BILL NO. 1
"An Act relating to motor vehicle registration; and
providing for an effective date."
REPRESENTATIVE GAIL PHILLIPS, SPONSOR noted that present
Alaska law does not provide for a state program of municipal
grants for recycling junked and abandoned cars. HB 1 would
create a program to do so by charging an annual fee to
vehicle owners at the time of registration and by creating a
fund in the Department of Transportation and Public
Facilities for the purpose of providing grants to
municipalities for transporting such vehicles to recycling
centers.
Representative Phillips observed that much of the beauty of
our Alaska scenery is marred by the sight of junked and
abandoned vehicles along roadways. In addition to the
visual disruption, these vehicles are attractive nuisances
where children may be at risk because of broken glass and
other hazards. There is also the environmental damage
stemming from leaking oil, fuel, brake and transmission
fluids and battery acids.
Representative Phillips explained that the program set forth
in HB 1 would add a recycling fee of $2 to the annual
vehicle registration fee. Current statistics show that
there are 488,937 or more registered vehicles in this state
which would create a fund of approximately $980,000. The
funds from the fee would be deposited into the general fund.
The bill also creates a municipal recycling grant fund
Representative Phillips stated that the legislature would
have to annually appropriate money from the General Fund
into the Municipal Recycling Grant Fund. The Department of
Transportation would then allocate grants to municipalities
for the recycling of motor vehicles. Several municipalities
have participated in programs for the removal of vehicles on
their own or in conjunction with state-sponsored
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"beautification" efforts. Other municipalities have
participated in a federal program administered by the
Department of Transportation/Public Facilities. During the
last 13 years, over 7,000 vehicles have been removed from
public roads under the federal program, with grants
totalling $522,000. However, continued funding of the
federal program is uncertain and would not be available in
those areas that do not have federal funding for roads.
Representative Phillips explained that because of the
Department of Transportation and Public Facilities'
expericence in administering and history with ISTEA
(Intermodal Surface Transportation Efficiency Act of 1991)
the legislation calls for DOT to be the administering
agency.
Representative Grussendorf asked if the municipalities that
are already providing this service will be the ones to get
all the funds. Representative Phillips stated that the
program will be based on pro rata of vehicle registration.
Representative Parnell noted that there is already an
abandoned vehicle fund in AS.28.11.110. He noted that the
program proposed in HB 1 is slightly different. He asked if
there had been discussion of merging the two funds.
Representative Phillips replied that there had not.
Representative Hanley referred to the fiscal note. He
observed that the revenue source would be $2 dollars per
vehicle. Representative Phillips noted that $2 dollars per
vehicle would raise approximately $2 million dollars. The
Alaska Municipal League has encouraged a $5 dollar fee. The
sponsor elected to keep the fee at $2 dollars per vehicle.
Co-Chair MacLean asked how HB 1 would work in rural areas.
Representative Phillips stated that back haul barges could
be used.
Representative Brown asked if language should be inserted to
direct the department in the allocation of funds. She
emphasized that there will not be sufficient funds to
address the need.
KENT SWISHER, ALASKA MUNICIPAL LEAGUE expressed support for
HB 1.
JEFF OTTENSEN, DEPARTMENT OF TRANSPORTATION AND PUBLIC
FACILITIES stressed that the program will not cover all the
demand. Only one out of 10 cars will be cleaned up. He
emphasized the need to encourage other disposition of
vehicles. In response to a question by Representative
Brown, he clarified that the federal program was a one time
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clean up effort. Cars had to be on or within 100 feet of a
federal or state right-a-way. Once funds were spent
municipalities were mandated to keep the highway clean. He
assured members that a formula can be developed to allow use
of funds to be divided among applicants.
Representative Brown asked if regulations would be adopted.
Mr. Ottensen replied that regulations would be enacted.
Representative Brown asked if the fiscal note addressed the
cost of enacting regulations. Mr. Ottensen answered that
the fiscal note does cover the cost of regulations.
Representative Brown asked if there are controls to assess
municipal spending. Mr. Ottensen replied that there is a
small amount of money included for audits. He added that
maintenance station operators will keep the Department
informed on municipal progress.
IRENE MORRIS, ALASKA ENVIRONMENTAL LOBBY spoke in support of
HB 1. She emphasized that HB 1 will help ensure that junked
and abandoned cars and trucks are removed from state and
municipal roadways. She added that HB 1 will help address
solid waste problems and potential safety and hazardous
waste dangers.
Representative Foster MOVED to report CSHB 1 (CRA) out of
Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CSHB 1 (CRA) was reported out of Committee with "no
recommendation" and with a fiscal impact note by the
Department of Public Safety, and with a zero fiscal note by
the Department of Environmental Conservation and with a
fiscal impact note by the Department of Transportation and
Public Facilities, dated 3/22/93
HOUSE BILL NO. 96
"An Act extending the termination date of the Alcoholic
Beverage Control Board."
Co-Chair Larson noted that HB 96 will extend the Alcoholic
Beverage Control Board. There is a zero fiscal note.
Representative Navarre MOVED to report HB 96 out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
HB 96 was reported out of Committee with a "do pass"
recommendation and with a zero fiscal note by the Department
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of Revenue, dated 3/26/93.
HOUSE BILL NO. 143
"An Act relating to the distribution of the revenue
obtained from imposition of the state tax on motor fuel
used in watercraft of all descriptions; and providing
for an effective date."
Representative Mackie noted that the Department of Revenue
has issued a new fiscal note based on amendments adopted by
the House Finance Committee, Work Draft for SSHB 143 (FIN).
The new fiscal note deletes a $112.1 thousand dollar request
in new positions. Changes made by the House Finance
Committee will require that municipalities eliminate the
need for the additional positions. He noted that an
estimated $9 - $10 million dollars is collected from the
program. An estimated 5 - 7 percent of the harbors are
municipally owned. Therefore 5 - 7 percent of the Fund will
be affected.
Members were presented with Amendment 1 by Representative
Mackie (Attachment 1). Representative Mackie noted that
rural areas that do not have boat harbors would be impacted
by the amendment. He emphasized that communities on river
systems pay fuel taxes and have needs due to erosion or haul
out facilities. The amendment attempts to address the needs
of these communities. He added that urban municipalities
such as Anchorage or Fairbanks could receive funding of up
to 50 percent if they apply and qualify. They would be
mandated to use the money for construction and maintenance
of public boat landing areas used by residents of the
municipality or or for local efforts initiated to prevent or
repair the effects of erosion along shorelines used as
public boat landing areas.
Co-Chair MacLean MOVED to ADOPT AMENDMENT NO. 1.
Representative Hanley OBJECTED for purpose of discussion.
Representative Mackie clarified that the Department of
Revenue would be responsible for the funds. The Department
of Transportation and Public Facilities will certify the
amount. The Department of Revenue will disperse the funds
after the Department of Transportation and Public Facilities
certify the amount each municipality receives.
Co-Chair MacLean asked if the Department of Transportation
and Public Facilities will publish a list of the
municipalities that have applied.
FRANK TURPIN, COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND
PUBLIC FACILITIES stated that the Department could publish a
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list of the municipalities that apply.
Representative Hanley express the concern that there is a
potential fiscal loss to the State of Alaska. He noted that
the definition of eligibility has been expanded.
Representative Mackie observed that the legislation is
designed to offset the impacts of fuel use and to take care
of harbors and boat launch facilities.
Representative Martin agreed that the amendment would
broaden eligibility. Representative Grussendorf stressed
that municipalities would address their priorities through
the Fund.
Representative Navarre stressed the need to raise new
revenues to offset the additional burden on the State's
treasury. Representative Brown asked if the Committee could
consider a small increase to offset the additional municipal
appropriation.
Representative Brown questioned if the use of "operating" on
page 1, line 13 is consistent with the use of "owned" on
page 2, line 5. She noted that the Department of
Transportation and Public Facilities owns the Anchorage
harbor facility but it is operated by the municipality.
Representative Mackie explained that the intent is that
funding will be allocated only for the portion owned by the
municipality. Members discussed the drafting language.
Representative Brown asked the definition of "municipality".
Co-Chair MacLean noted that "municipality" refers to first
and second class cities and municipalities of the state.
Representative Brown asked if fuel is sold outside of
municipalities. Co-Chair MacLean assured her that fuel is
sold in villages.
LARRY MEYERS, DIRECTOR, INCOME AND EXCISE AUDIT DIVISION,
DEPARTMENT OF REVENUE discussed the Department's fiscal
notes. He clarified that there are approximately 61 major
wholesale fuel distributors.
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Representative Grussendorf emphasized that the intent of the
amendment is to get operation and maintenance money to
municipalities for harbors or boat landing facilities. He
stressed that the cost of maintenance is cheaper than the
cost of repair.
(Tape Change, HFC 93-84, Side 2)
Co-Chair Larson asked if Title 28 would allow municipalities
to levy the tax. Mr. Meyers could not answer.
Representative Mackie noted that funding is subject to
appropriation. Representative Grussendorf did not think
municipalities could discriminate in taxing a single
commodity.
Representative Hanley reiterated his concerns that the
legislation would divert money from the State. Co-Chair
MacLean pointed out that the fuel tax is collected from all
users of motor fuels.
Representative Hanley asserted that a revenue sharing
program is being developed. He asked that the legislation
be held until the Department of Revenue presents a new
fiscal note. Representative Martin agreed.
Co-Chair MacLean WITHDREW her amendment. Co-Chair Larson
expressed concern that revenues will be withdrawn from the
State.
Representative Brown reiterated her concerns regarding the
use of "operating" on page 1, line 13 and of "owned" on page
2, line 5. Representative Mackie noted that reimbursement
is only provided to municipalities that own a portion of the
facility. Representative Brown asked if Anchorage would be
reimbursed under the legislation. Members further discussed
the criteria for reimbursement.
Representative Martin asked that HB 143 be held. Co-Chair
Larson announced that HB 143 would be held in a subcommittee
consisting of Representatives Hanley, Parnell and Brown.
Representative Grussendorf emphasized that the intention of
HB 143 is to encourage municipalities to own and operate
harbor facilities.
Representative Mackie expressed concern that HB 143 would
not meet the deadline for passage of legislation from
committee. Co-Chair Larson MOVED to report HB 143 out of
Committee with individual recommendations and with the
accompanying fiscal notes. Representative Martin OBJECTED.
A roll call vote was taken on the motion.
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IN FAVOR: Brown, Grussendorf
OPPOSED: Hanley, Martin, Parnell, Larson, MacLean
Representatives Hoffman, Navarre, Foster and Therriault were
absent from the vote.
The MOTION FAILED (2-5).
Representative Hanley detailed issues that need to be
resolved.
He stressed the need for a fiscal note by the Department of
Revenue addressing the amendment. He wanted to know how
much water fuel taxes are collected. How much fuel tas is
collected in municipalities that operate harbors. How much
is collected in municipalities that do not have state owned
docks. He noted that the issue identified by Representative
Brown regarding "operated" and "owned" also needs to be
resolved.
HB 143 was HELD in Committee.
HOUSE BILL NO. 58
"An Act relating to the budget reserve fund established
under art. IX, sec. 17, Constitution of the State of
Alaska."
DARREL J. REXWINKLE, COMMISSIONER, DEPARTMENT OF REVENUE
noted that HB 58 would change the Attorney General's opinion
in regards to which monies would be deposited in the
Constitutional Budget Reserve Fund. He observed that HB 58
states that revenues from cases that remain in "informal
hearing status" for more than 6 months would be deposited in
the Constitutional Budget Reserve Fund.
Commissioner Rexwinkle reviewed the audit process. He
expressed the concern that companies could determine by
their action where money would be deposited. He theorized
that substantial amounts could go into the Constitutional
Budget Reserve Fund under the legislation. He added that
there is at least $266.6 million dollars in back settlements
that would need to be deposited. He observed that there is
not a large General Fund balance to cover the back
settlements.
Representative Brown noted that under AS 43.05.240 (b), "A
person aggrieved by the action of the department in fixing
the amount of a tax or in imposing a penalty may apply to
the department and request a formal hearing. (1) in place of
the informal conference provided for in (a) of this,
section, within 60 days from the date of mailing the notice
required to be given to the person by the department; (2)
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within 30 days after decision resulting from an informal
conference." She asserted that a company can direct the
procedure in order to divert money into the Constitutional
Budget Reserve Fund.
Commissioner Rexwinkle argued that a formal conference is
accompanied by additional process.
Co-Chair MacLean noted the retroactive effective date of
July 1, 1990. Co-Chair Larson explained that the effective
date would include the $144.9 million dollar administrative
settlement in FY 93. Revenues in FY 93 included another
$121.3 million dollars. An additional $13.6 million dollars
were generated in interest. A total of $279.8 million
dollars are included in the Statutory Budget Reserve would
be affected. He added that settlements in FY 94 would also
be leveraged.
HB 58 was HELD in Committee.
ADJOURNMENT
The meeting adjourned at 10:04 a.m.
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