Legislature(1993 - 1994)

04/19/1994 08:35 AM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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                     HOUSE FINANCE COMMITTEE                                   
                         April 19, 1994                                        
                            9:10 a.m.                                          
                                                                               
  TAPE HFC 94-132, Side 1, #000 - end.                                         
  TAPE HFC 94-132, Side 2, #000 - 319.                                         
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair Larson called the House  Finance Committee to order                 
  at 9:10 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                                                                 
                                                                               
  C.E. Swackhammer, Deputy  Commissioner, Department of Public                 
  Safety; Juanita Hensley, Chief Driver Services, Division  of                 
  Motor Vehicles, Department of Public Safety.                                 
                                                                               
  SUMMARY INFORMATION                                                          
                                                                               
  HCR 32    Establishing  the  Joint  Task Force  on  Military                 
            Bases in Alaska.                                                   
                                                                               
            HCR  was  reported  out   of  Committee  with  "no                 
            recommendation" and with a zero fiscal note by the                 
            Legislative Affairs Agency.                                        
                                                                               
  HB 445    "An Act relating  to operating or driving  a motor                 
            vehicle,  commercial  motor vehicle,  aircraft, or                 
            watercraft."                                                       
                                                                               
            HB 445  was reported out  of Committee with  a "do                 
            pass" recommendation and with a fiscal impact note                 
            by the  Department of Public Safety, dated 2/4/94;                 
            and  with  three  zero fiscal  notes,  two  by the                 
            Department of Administration, dated 2/4/94 and one                 
            by the Department of Law, dated 2/4/94.                            
                                                                               
  HB 541    "An  Act  providing for  an  advisory vote  of the                 
            people  concerning  a  preferred  alternative  for                 
            increasing  revenue  available  to  support  state                 
            government; and providing for an effective date."                  
                                                                               
                                1                                              
                                                                               
                                                                               
  HOUSE CONCURRENT RESOLUTION NO. 32                                           
                                                                               
       Establishing the Joint Task Force  on Military Bases in                 
       Alaska.                                                                 
                                                                               
  Co-Chair MacLean  MOVED to  report HCR  32 out  of Committee                 
  with individual  recommendations and  with the  accompanying                 
  fiscal note.  There being NO OBJECTION, it was so ordered.                   
                                                                               
  Representative Brown expressed concern that the accompanying                 
  zero fiscal note may not be adequate.                                        
                                                                               
  HCR was reported  out of Committee with  "no recommendation"                 
  and  with a  zero  fiscal note  by  the Legislative  Affairs                 
  Agency.                                                                      
  HOUSE BILL NO. 541                                                           
                                                                               
       "An Act providing  for an advisory  vote of the  people                 
       concerning  a  preferred  alternative   for  increasing                 
       revenue  available  to  support state  government;  and                 
       providing for an effective date."                                       
                                                                               
  Co-Chair Larson noted  that the legislation provides  for an                 
  advisory vote.  The ballot provision asks citizens of Alaska                 
  which alternative they prefer for raising revenues:                          
                                                                               
       *    A state income tax;                                                
                                                                               
       *    A state sales tax; or                                              
                                                                               
       *    Capping permanent fund earnings to be  distributed                 
            as earnings.                                                       
                                                                               
  Co-Chair Larson expressed concern that comparable need to be                 
  set to demonstrate how $450 to $500 million dollars could be                 
  raised.                                                                      
                                                                               
  Representative Hanley maintained that comparisons need to be                 
  drawn between the revenue each item would raise.                             
                                                                               
  Representative Navarre suggested  that the  response to  the                 
  ballot  question  would be  minimal.   He observed  that the                 
  public wishes to  see the budget cut.  He  stressed the need                 
  to inform the  public in regards to the  over-all, long-term                 
  state  economic  picture.   He  emphasized that  there  is a                 
  misconception  that the  budget can  be easily  cut with  no                 
  impact  or increased taxes.   He observed  that reduction in                 
  state support for municipalities has resulted in an increase                 
  in municipal taxes.                                                          
                                                                               
  Representative Therriault suggested that  a reduction of the                 
                                                                               
                                2                                              
                                                                               
                                                                               
  budget should be added to the ballot question.                               
                                                                               
  Representative Navarre  emphasized that the  perception that                 
  the budget can be cut without impacts is inaccurate.                         
                                                                               
  Representative   Grussendorf   expressed  support   for  the                 
  legislation.                                                                 
                                                                               
  Representative  Martin noted that  Alaska has  experienced a                 
  high voter turnout in past elections.   He stressed that the                 
  ballot  question   will  generate  discussion   and  provide                 
  guidelines.   He emphasized  that it will  allow citizens to                 
  have a voice in the legislature's action.                                    
                                                                               
  Representative  Grussendorf noted  that the  ballot question                 
  does not address the  use of the earnings income  account in                 
  the general fund.                                                            
                                                                               
  Co-Chair  MacLean stressed  that varying  levels of  capping                 
  permanent fund dividends  should be discussed in  the ballot                 
  question.                                                                    
                                                                               
  Co-Chair Larson  provided members with  quotations regarding                 
  permanent fund restrictions and the legislature's ability to                 
  spend from the Fund's  earnings reserve (copy on file).   He                 
  noted that:                                                                  
                                                                               
       *    "All  income  from  the  permanent fund  shall  be                 
            deposited  in the  general  fund unless  otherwise                 
            provided  by law." Article  IX, Section 15, Alaska                 
            Constitution                                                       
                                                                               
       *    "The income of  the fund  would be deposited  into                 
            the  general  fund  without   any  permanent  fund                 
            restrictions."  Jay S. Hammond, Governor,  January                 
            15, 1976                                                           
                                                                               
       *    "The purpose of the language  in the last sentence                 
            of the  resolution is to  give future legislatures                 
            maximum flexibility in  using the Fund's  earnings                 
            reserve..."  Hugh  Malone, Chairman  House Finance                 
            Committee on CSSSHJR 39                                            
                                                                               
       *    "When the oil and gas is depleted, where  will the                 
            funds to feed our giant  government come from? the                 
            answer  is:   The  Alaska  Permanent Fund."   1976                 
            Election Pamphlet in regards to proposition no. 2                  
                                                                               
       *    Each new legislature "is entitled  to make its own                 
            choices about the  use of Fund earnings."   Alaska                 
            Permanent Fund 1991 Annual Report                                  
                                                                               
                                                                               
                                3                                              
                                                                               
                                                                               
       *    "The purpose of the  Constitutional Budget Reserve                 
            Fund  is  to  cushion the  impact  of  reduced oil                 
            revenue  as  oil  production  declines  and  state                 
            revenues are depleted.   Currently, state  revenue                 
            is not depleted.  For  example, there is presently                 
            some $950,000,000  in the Permanent  Fund Earnings                 
            Account,  available  for   appropriation  by   the                 
            legislature."  Superior Court Judge John Resse                     
                                                                               
  Co-Chair  Larson  noted that  $551  million dollars  will be                 
  distributed as dividends.   An income  tax would have to  be                 
  twice the amount  it was when  it was discontinued to  raise                 
  the  equivalent amount.  A state  sales tax would have to be                 
  set at approximately 20 percent to raise equal revenues.  He                 
  stressed the need to open options to the legislature.                        
                                                                               
  Representative  Brown   stressed  that  options   should  be                 
  parallel.  She noted that there are other options not on the                 
  list.   She suggested that voters choose  two of five or six                 
  options.  She suggested that an  option of other taxes could                 
  include  motor fuel,  alcohol,  cigarette, flat  employment,                 
  fish, and mining taxes.  She added that specific items could                 
  be  identified for  budget  cuts.   She  concluded that  the                 
  inclusion of more options would  allow a lower threshold per                 
  item.  She  suggested that increased  oil taxes and a  state                 
  wide property tax should also be included.  She suggested an                 
  interim  commission  be  created  to  address the  issue  of                 
  raising revenues.                                                            
                                                                               
  Co-Chair MacLean  stressed  that the  Alaska Permanent  Fund                 
  needs to be revisited.   She suggested that the  amount used                 
  as inflation proofing is too high.                                           
                                                                               
  Representative  Martin  expressed  support  for  HB  541  as                 
  drafted.  He felt that too  many options would be confusing.                 
  He did  not  want  an  interim  commission  to  replace  the                 
  legislation.                                                                 
                                                                               
  Representative Navarre observed that a state sales tax would                 
  be  difficult  to  administer.     He  emphasized  that  the                 
  legislature holds  the economic  future of  the  state.   He                 
  stressed that if  the economic structure, including  the tax                 
  structure,  is  not addressed  the state  will be  lead into                 
  economic collapse.                                                           
                                                                               
  Co-Chair  Larson  noted that  the  public perception  is not                 
  favorable.    He questioned  if  there should  be additional                 
  options.                                                                     
                                                                               
  Representative Hanley  observed that the public would choose                 
  to cut the budget instead of raising taxes.  He stressed the                 
  need to educate  the public.   He emphasized  that the  more                 
                                                                               
                                4                                              
                                                                               
                                                                               
  options added the more difficult the process to educate.                     
                                                                               
  Representative Hanley  suggested that the  legislature state                 
  that:  "The total state general  fund spending budget for FY                 
  95  is approximately  $2.5 billion  dollars.  If  prices for                 
  Alaskan oil average $14 dollars a  barrel for that year, the                 
  total general fund recurring revenues  are anticipated to be                 
  $1.7 billion dollars.   That  leaves a gap  of $800  million                 
  dollars  that  we are  currently  using savings  accounts to                 
  fill."                                                                       
                                                                               
  Representative  Hanley suggested  that the  legislation also                 
  state:   Each of the following alternatives  would fill $250                 
  to $300 million  dollars of that gap.   Pick no more  than 2                 
  options.  He stated that he would add:  Cut the budget by 10                 
  percent.                                                                     
                                                                               
  Representative Hanley noted  that to raise the $250  to $300                 
  million dollars, a sales tax would have to be 10 percent and                 
  dividends would have to be capped at $500 dollars.                           
                                                                               
  Representative Grussendorf noted  a lack  of clarity on  the                 
  dividend question.    He emphasized that the state operating                 
  budget does not contain many mid  management level jobs.  He                 
  suggested that  the legislature consider  contracting for  a                 
  survey.                                                                      
                                                                               
  Representative Navarre stressed  that the option to  cut the                 
  budget by 10 percent is misleading.   He emphasized that the                 
  budget  is  over  inflated  by   the  inclusion  of  program                 
  receipts, federal matching funds, shared taxes and education                 
  funding.                                                                     
                                                                               
  Representative Brown noted that no one has advocated a state                 
  sales tax as a  viable alternative.  She suggested  that the                 
  state  sales  tax option  be  deleted.    She accented  that                 
  choices should be feasible to implement.                                     
                                                                               
  Representative Martin  argued that the  ballot question will                 
  educate voters and that all options should remain.                           
                                                                               
  (Tape Change, HFC 94-132, Side 2)                                            
                                                                               
  Co-Chair Larson expressed his intention to add other options                 
  to the legislation.                                                          
                                                                               
  HB 541 was HELD in Committee for further discussion.                         
  HOUSE BILL NO. 445                                                           
                                                                               
       "An  Act  relating  to  operating  or driving  a  motor                 
       vehicle,   commercial   motor  vehicle,   aircraft,  or                 
                                                                               
                                5                                              
                                                                               
                                                                               
       watercraft."                                                            
                                                                               
  C.E. SWACKHAMMER, DEPUTY  COMMISSIONER, DEPARTMENT OF PUBLIC                 
  SAFETY stressed that the legislation addresses the high rate                 
  of alcohol and drugs involved in  state accidents.  He noted                 
  that Alaska is number two in  the nation in terms of alcohol                 
  related traffic crashes.   He explained that HB  445 changes                 
  the implied  consent law to  allow for  chemical testing  of                 
  individuals involved in fatal or serious injury accidents.                   
                                                                               
  In  response  to  a question  by  Representative  Brown, Mr.                 
  Swackhammer noted that the legislation does not increase the                 
  penalty  for the  crime of injuring  someone.   He clarified                 
  that  the  information  will be  used  to  identify impaired                 
  drivers that cause fatal  or serious injury.  He  noted that                 
  currently there must be  an arrest in order to  obtain blood                 
  or urine.  He stressed that  in most serious injury or fatal                 
  accidents it is  not practical  for the officer  to make  an                 
  arrest  because the state would  be liable for medical costs                 
  if  the person is arrested.   Samples would  be taken at the                 
  hospital.   He  explained that  95 percent  of the  effected                 
  persons would  be in the hospital  due to the nature  of the                 
  accident.  In most cases the blood or urine would be already                 
  drawn.  The legislation would provide access to the samples.                 
                                                                               
                                                                               
  Representative Martin referred to section one.                               
                                                                               
  JUANITA  HENSLEY,  DIRECTOR,  DIVISION  OF  MOTOR  VEHICLES,                 
  DEPARTMENT OF PUBLIC  SAFETY clarified  that section one  is                 
  existing statute allowing administrative  license revocation                 
  for a  person who  takes the  breath test  and  goes 1.0  or                 
  greater, or for those that refuse the test under the implied                 
  consent law.                                                                 
                                                                               
  Representative Grussendorf referred  to page 4, lines  22 to                 
  31.   He  expressed concern  with self  incrimination.   Ms.                 
  Hensley observed that  other states have similar  laws.  She                 
  added that existing statutes allow  the automatic drawing of                 
  blood if a  person is  unconscious.  She  stressed that  the                 
  legislation  would  only  effect  serious  injury  or  fatal                 
  accidents.  She explained that if an individual refuses they                 
  will  be  subject to  the same  penalties as  an intoxicated                 
  driver.                                                                      
                                                                               
  In  response  to  a question  by  Representative  Brown, Mr.                 
  Swackhammer  stated  that  the use  of  drugs  or controlled                 
  substances are not easy to detect during investigation.                      
                                                                               
  Representative  Navarre clarified  that  the accident  would                 
  provide reasonable cause.                                                    
                                                                               
                                                                               
                                6                                              
                                                                               
                                                                               
  In response to a question  by Representative Therriault, Mr.                 
  Swackhammer  explained that  in the  case of  an arrest  the                 
  Department of Public Safety can forcibly take blood samples.                 
  He reiterated that  it is  not practical to  make an  arrest                 
  because in most cases the person is hospitalized.                            
                                                                               
  Mr.  Swackhammer  assured Representative  Brown,  that drugs                 
  administered at the hospital would be taken into account.                    
                                                                               
  Co-Chair MacLean  MOVED to  report HB  445 out of  Committee                 
  with individual  recommendations and  with the  accompanying                 
  fiscal note.                                                                 
                                                                               
  Representative  Brown questioned  the  Department of  Public                 
  Safety's fiscal note.  Mr. Swackhammer acknowledged that the                 
  department would  be eligible  for federal  funds under  the                 
  enactment.   He added that  there would  be a savings  do to                 
  samples that would not be sent out for examination.                          
                                                                               
  There being NO OBJECTION to the motion to report HB 445 from                 
  Committee, it was so ordered.                                                
                                                                               
  HB  445  was reported  out  of  Committee with  a  "do pass"                 
  recommendation  and  with  a  fiscal   impact  note  by  the                 
  Department of Public  Safety, dated  2/4/94; and with  three                 
  zero fiscal notes, two by  the Department of Administration,                 
  dated 2/4/94 and one by the Department of Law, dated 2/4/94.                 
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 10:11 a.m.                                          
                                                                               
                                                                               
                                7                                              

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