Legislature(1997 - 1998)

03/30/1998 02:25 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
           HOUSE FINANCE COMMITTEE                                             
              MARCH 30, 1998                                                   
                 2:25 P.M.                                                     
                                                                               
TAPE HFC 98 - 82, Side 1                                                       
TAPE HFC 98 - 82, Side 2                                                       
                                                                               
CALL TO ORDER                                                                  
                                                                               
Co-Chair Gene Therriault called the House Finance Committee                    
meeting to order at 2:25 p.m.                                                  
                                                                               
PRESENT                                                                        
                                                                               
Co-Chair Hanley    Representative Kelly                                        
Co-Chair Therriault   Representative Kohring                                   
Representative Davies  Representative Martin                                   
Representative Davis   Representative Mulder                                   
Representative Foster                                                          
Representative Grussendorf                                                     
                                                                               
Representative Moses was absent from the meeting.                              
                                                                               
ALSO PRESENT                                                                   
                                                                               
Senator Drue Pearce; Representative Joe Ryan; David Pree,                      
Staff, Representative Ryan; Bob Bartholomew, Deputy                            
Director, Income and Excise Audit Division, Department of                      
Revenue; Diane Mayer, Director, Governmental Coordination,                     
Office of the Governor; Sara Fisher-Good, Staff,                               
Representative Therriault.                                                     
                                                                               
SUMMARY                                                                        
                                                                               
HB 28 "An Act repealing the Alaska Coastal Management                          
Program and the Alaska Coastal Policy Council, and                             
making conforming amendments because of those                                  
repeals."                                                                      
                                                                               
CSHB 28 (FIN) was REPORTED out of Committee with                               
"no recommendation" and with four zero fiscal                                  
notes, one by the Department of Administration,                                
one by the Department of Community and Regional                                
Affairs, one by the Department of Environmental                                
Conservation; and one by the Department of Fish                                
and Game, and a fiscal impact note by the Office                               
of the Governor.                                                               
                                                                               
HB 252 "An Act relating to criminal records; relating to                       
notice about and registration of sex offenders and                             
child kidnappers; and amending Rules 11(c) and                                 
32(c), Alaska Rules of Criminal Procedure."                                    
                                                                               
 CSHB 252 (FIN) was REPORTED out of Committee with                             
a "do pass" recommendation and with five fiscal                                
impact notes one by the Alaska Court System, two                               
by the Department of Public Safety, one by the                                 
Department of Administration and one by the                                    
Department of Corrections; and one zero fiscal                                 
note by the Department of Law.                                                 
                                                                               
SB 240 "An Act repealing the tax on punch boards and                           
coin-operated amusement and gaming devices; and                                
providing for an effective date."                                              
                                                                               
 SB 240(title am)(reengrossed) was REPORTED out of                             
Committee with a "do pass" recommendation and with                             
a zero fiscal note by the Department of Revenue.                               
HOUSE BILL NO. 252                                                             
                                                                               
"An Act relating to criminal records; relating to                              
notice about and registration of sex offenders and                             
child kidnappers; and amending Rules 11(c) and 32(c),                          
Alaska Rules of Criminal Procedure."                                           
                                                                               
Co-Chair Therriault provided members with a proposed                           
committee substitute for HB 252, work draft 0-LS0818\Z,                        
3/12/98 (copy on file).  He also provided members with                         
Amendment 1 (copy on file).  Amendment 1 reduces to 35 the                     
minimum number of days a defendant convicted of failure to                     
register, as a sex offender or child kidnapper would serve.                    
This is a reduction from 90 days.  He explained that the                       
amendment is a response to fiscal concerns.                                    
                                                                               
REPRESENTATIVE JOE RYAN stated that the amendment would not                    
affect the legislation's effectiveness and would reduce the                    
fiscal cost.  Co-Chair Therriault noted that there would be                    
a reduction of approximately $87 thousand dollars to the                       
Department of Corrections.                                                     
                                                                               
DAVE PREE, STAFF, REPRESENTATIVE RYAN noted that the fiscal                    
note from the Alaska Public Defenders Agency contains a                        
reference to newspaper publication which is no longer                          
contained in the legislation.                                                  
                                                                               
Co-Chair Therriault MOVED to ADOPT Amendment 1.                                
Representative Ryan observed that the intent is to register                    
serious sex offenders.  Failure to register would carry a                      
minimum sentence of 35 days.  He stressed that the current                     
system is not working.  Offenders are receiving suspended                      
sentences and still not registering.  Co-Chair Therriault                      
pointed out that 35 days in jail would act as a deterrent.                     
Employment could be risked by the jail time.  There being NO                   
OBJECTION, Amendment 1 was adopted.                                            
                                                                               
Mr. Pree noted that the legislation currently requires the                     
information to be posted on the Internet.                                      
                                                                               
Co-Chair Therriault observed that the adoption of Amendment                    
1 requires a new fiscal note by the Department of                              
Corrections.  He added that the Alaska Public Defenders                        
Agency's fiscal note would be updated to reflect the current                   
version of the bill.                                                           
                                                                               
Representative Foster MOVED to ADOPT, work draft 0-LS0818\Z,                   
3/12/98 as amended by Amendment 1.  There being NO                             
OBJECTION, it was so ordered.                                                  
                                                                               
Representative Foster MOVED to report CSHB 252 (FIN) out of                    
Committee with the accompanying updated fiscal notes.                          
                                                                               
CSHB 252 (FIN) was REPORTED out of Committee with a "do                        
pass" recommendation and with five fiscal impact notes one                     
by the Alaska Court System, two by the Department of Public                    
Safety, one by the Department of Administration and one by                     
the Department of Corrections; and one zero fiscal note by                     
the Department of Law.                                                         
HOUSE BILL NO. 28                                                              
                                                                               
"An Act repealing the Alaska Coastal Management Program                        
and the Alaska Coastal Policy Council, and making                              
conforming amendments because of those repeals."                               
                                                                               
Co-Chair Therriault noted that the Committee received work                     
draft 0-LS0189\T, 3/26/98 on 3/27/98.                                          
                                                                               
Representative Davies questioned why coastal resource                          
districts are prohibited from incorporating by reference                       
state statutes and administrative regulations.                                 
                                                                               
Co-Chair Therriault explained that state statutes and                          
regulations change.  Districts are supposed to justify their                   
plans independently of state statutes and regulations.  When                   
the statutes and regulations are the same, but                                 
interpretation differs, the issue becomes who should                           
interpret the statutes and regulations.                                        
                                                                               
DIANE MAYER, DIRECTOR, GOVERNMENTAL COORDINATION, OFFICE OF                    
THE GOVERNOR observed that the Coastal Policy Council Review                   
identified this area for amendment as the result of an                         
assessment.  The assessment was completed at the end of                        
1996.  They recommended that local coastal district programs                   
not repeat state laws or regulations by reference.  Two                        
versions would exist if regulation referenced in a local                       
plan were changed by the agency.  The state would have a new                   
version and the local district would have the old version.                     
By definition coastal districts receive deference in                           
interpreting their plans.  Since the local district has                        
deference they would define state law.  The Council felt                       
that the agency should be given deference on the                               
interpretation of state regulations, unless the district                       
demonstrated unique expertise.  Districts argue points                         
relating to state laws or regulations based on their level                     
of professional expertise.                                                     
                                                                               
Representative Davies stressed that it is useful to adopt                      
statutes by reference in order to keep local requirements                      
current.  He stressed that a coastal district may want to                      
have a definition in their plan that is consistent with                        
statute.                                                                       
                                                                               
Ms. Mayer observed that there is one statewide coastal                         
management plan.  Districts amend the plan for the                             
uniqueness of their area.                                                      
                                                                               
Co-Chair Therriault interjected that state statutes and                        
regulations form the base.  Local areas are supposed to                        
bring an additional level of scrutiny.                                         
                                                                               
Ms. Mayer agreed that local areas bring an additional look                     
of coastal resource uses and values from their perspective.                    
                                                                               
In response to a question by Representative Davies, Ms.                        
Mayer referred to seafood discharges from a seafood                            
processing plant in the Aleutians.  The discharge                              
requirements are governed by the state's water quality                         
standard.  The Department of Environmental Conservation                        
defines the mixing zone.  Coastal districts can enhance                        
protections from the discharge.  Standards would have to                       
relate to unique values or uses in the area of the                             
discharge.  If state and local plans had the same numbers                      
they would be arguing over interpretation.                                     
                                                                               
Ms. Mayer noted that when local districts are at the table                     
they have the ability to discuss what is on the table and                      
bring in their unique view.                                                    
                                                                               
In response to a question by Representative Davies, Ms.                        
Mayer observed that the Department of Environmental                            
Conservation defines mixing zone standards.  A district                        
would have to have specific and acknowledged professional                      
expertise in the subject to address the need to reduce                         
concentrations.   A compelling argument could be made based                    
on a traditional use of the area that needs to be protected.                   
If differences were maintained at the regional level it                        
would be brought to the director or commissioner level for a                   
policy call.                                                                   
                                                                               
Representative Davies argued that there might be reasons to                    
adopt a state standard in a local plan.  Ms. Mayer pointed                     
out that if the State has a definition or rule that the                        
local district wants to be operative, that it would be                         
operative.  The prohibition is against incorporation of                        
state statutes or regulations into their policy.  There can                    
be a reference section in the back to reference a state law                    
or regulation, "for purposes of discussion."                                   
                                                                               
Ms. Mayer explained that values are defined through public                     
review and approval.  She emphasized that the intent is not                    
to make the process less efficient.  In response to a                          
question by Co-Chair Therriault, Ms. Mayer clarified that                      
the assessment by the Coastal Policy Council was conducted                     
over a year and a half.                                                        
                                                                               
Representative Davies MOVED to ADOPT Amendment 1 (copy on                      
file).  He explained that the amendment further defines                        
"coastal waters".  Amendment 1 would clarify that "coastal                     
water" means a water body in the coastal area, including                       
wetlands and the intertidal area."                                             
                                                                               
SARA FISHER-GOOD, STAFF, REPRESENTATIVE THERRIAULT referred                    
to section 4, page 4, subsection (B).  Co-Chair Therriault                     
observed that the legislation defines "coastal waters" as                      
"adjacent to tidal shorelines and that contains a measurable                   
quantity or percentage or sea water."  He questioned why a                     
consistency determination should be required on a lake that                    
has no outflow.  He stressed that the intent is to protect                     
coastal waters.                                                                
                                                                               
Representative Davies pointed out that birds that nest in                      
salt-water marshes sometimes travel a little inland.                           
                                                                               
Ms. Fisher-Good noted that the definition is a compromise                      
from the original proposal to shrink the coastal zone to the                   
zone of direct influence or interaction.  The intent is to                     
allow boundaries to remain, but restrict the coastal                           
district's action relating to activities beyond the coastal                    
boundary.  Consistency determinations would only be allowed                    
if the user activity has a direct and significant impact on                    
coastal waters.  The intent is to have a strict definition                     
of coastal waters.                                                             
                                                                               
Ms. Mayer explained that the legislation would allow a                         
definition determination on salt water.  She emphasized that                   
districts expanded boundaries to pick up anadromous fish                       
values and demonstrate an effect on the streams.  She                          
recalled that the sponsor indicated that he would let the                      
expanded boundaries stand as long as reviews in expanded                       
areas were limited to effects in the streams.  The                             
legislation currently restricts consideration to salt                          
waters.  She maintained that the fish values, that the                         
program was designed to protect, are missing.  She noted                       
that Amendment 1 would pick up the stream channels.                            
                                                                               
Co-Chair Therriault asserted that any activity in the stream                   
areas that require state permits would have public input.                      
State permits are designed to protect the ability of the                       
stream to act as a rearing area for anadromous fish.                           
                                                                               
Ms. Mayer stressed that the coastal management process                         
brings local knowledge and understanding.  Districts and                       
their policies are brought to the table by consistency                         
determinations.  She stressed that the issue is "letting                       
coastal management work in the area for which we have                          
defined the coastal boundary, to make it work."                                
                                                                               
Co-Chair Therriault noted that coastal districts could still                   
participate in the public process for the issuance of                          
permits.  Ms. Mayer stressed that the coastal program                          
envisions that coastal districts would have standing in                        
those project reviews based on the policy in their plan that                   
may apply.  She explained that the relationship of local                       
management to state management is analogous to the state                       
having a higher standard than the federal government.                          
                                                                               
Representative Davis spoke in support of the inclusion of                      
anadromous streams.   He observed that the legislation makes                   
anadromous streams insignificant.  Ms. Mayer noted that                        
Alaska's coastal program is broad.                                             
                                                                               
A roll call vote was taken on the motion.                                      
                                                                               
IN FAVOR: Grussendorf, Davies                                                  
OPPOSED: Davis, Foster, Martin, Therriault                                     
                                                                               
Co-Chair Hanley and Representatives Kelly, Kohring, Moses                      
and Mulder were absent from the vote.                                          
                                                                               
The MOTION FAILED (2-4).                                                       
                                                                               
Ms. Fisher-Good reviewed the fiscal note by the Office of                      
the Governor, Governmental Coordination.   The fiscal note                     
requests $345 thousand dollars.  It includes $5 thousand                       
dollars for program implementation; $10 thousand dollars for                   
required regulations; $100 thousand dollars for boundary                       
amendments; and $230 thousand dollars to remove reference to                   
statutes or regulations by reference.  The Department of                       
Law's fiscal note is for $33.4 thousand dollars.  She                          
recommended that the Department of Law's fiscal note be                        
zero.  The Department of Law receives a universal service                      
agreement through the Division of Governmental Coordination.                   
She maintained that local districts should be able to                          
incorporate changes with their existing grants.  She                           
observed that $93 thousand dollars in additional federal                       
dollars would be available as a Governor's budget amendment                    
for the Division of Governmental Coordination.  She                            
recommended that the Division's fiscal note be reduced to                      
$58.4 thousand dollars.  This would incorporate the                            
Department of Law's fiscal note.  The Division would have                      
the flexibility to distribute the funding to other agencies.                   
                                                                               
(Tape Change, HFC 98 - 82, Side 2)                                             
                                                                               
Ms. Fisher-Good maintained that the $93 thousand dollar                        
budget amendment along with $10 thousand dollars included in                   
the fiscal note would be sufficient to cover boundary                          
amendments.                                                                    
                                                                               
Representative Martin MOVED to report CSHB 28 (FIN) out of                     
Committee with the accompanying amended fiscal notes.                          
Representative Grussendorf OBJECTED.                                           
                                                                               
Representative Grussendorf expressed concern that the                          
legislation is not supported by any of the affected                            
municipalities.  He questioned why the program is being                        
amended.  He emphasized that communities in his district                       
support the program in its current version.                                    
                                                                               
Co-Chair Therriault stressed that passage of the legislation                   
maintains a functional program.  He asserted that the                          
program is not being gutted.  He stressed that the right of                    
municipalities to participate is maintained.                                   
                                                                               
Representative Davis acknowledged improvements to the                          
legislation.  He noted his intent to work toward further                       
improvement.  Co-Chair Therriault assured him that he would                    
continue to work with the Division and members to address                      
concerns.                                                                      
                                                                               
A roll call vote was taken on the motion to move CSHB 28                       
(FIN) from Committee.                                                          
                                                                               
IN FAVOR: Davis, Foster, Kelly, Martin, Mulder, Therriault                     
OPPOSED: Moses, Grussendorf, Davies                                            
                                                                               
Co-Chair Hanley and Representative Kohring were absent from                    
the vote.                                                                      
                                                                               
The MOTION PASSED (6-3).                                                       
                                                                               
CSHB 28 (FIN) was REPORTED out of Committee with "no                           
recommendation" and with four zero fiscal notes, one by the                    
Department of Administration, one by the Department of                         
Community and Regional Affairs, one by the Department of                       
Environmental Conservation; and one by the Department of                       
Fish and Game, and a fiscal impact note by the Office of the                   
Governor.                                                                      
SENATE BILL NO. 240                                                            
                                                                               
"An Act repealing the tax on punchboards and coin-                             
operated amusement and gaming devices; and providing                           
for an effective date."                                                        
                                                                               
SENATOR DRUE PEARCE spoke in support of SB 240.  She                           
observed that SB 240 is an Act repealing coin operated                         
devices and the Punchboards Tax Program.   The program began                   
in 1941 as a tax on amusement machines such as billiard                        
tables, jukebox machines and pinball games.  The purpose of                    
the program was to raise revenues and track the number of                      
amusement games.  Repeal of the program would lessen the                       
burden on 250 businesses in the state and free up 400 hours                    
of Department of Revenue staff time for higher priority                        
work.  The amount of revenue lost from repealing the program                   
would be offset by money collected from increasing                             
compliance of larger tax programs.                                             
                                                                               
Senator Pearce observed that, currently, 250 businesses                        
annually file a return and pay the appropriate amount of                       
tax.  The current annual tax rate is $48 per device.  The                      
rate has remained virtually unchanged since 1947.  The                         
current program collects $90,000, shares $32,000 back to                       
local governments and costs $15,000 to operate.  Thus the                      
net general fund revenue is $43,000.  Department of Revenue                    
officials have discussed the program repeal with several                       
local government officials and the Alaska Municipal League.                    
All concurred that they could not afford to administer the                     
program locally for the small amount of revenue received.                      
She emphasized that repealing the program makes good                           
business sense and public policy.  The Department of Revenue                   
presented the matter.                                                          
                                                                               
Representative Davies asked if consideration was given to                      
increasing the tax.  Senator Pearce emphasized that the                        
program is expensive to administer.  She did not think that                    
the original intent to track the number of games and raise                     
revenues was being served by the program.                                      
                                                                               
In response to comments by Representative Grussendorf,                         
Senator Pearce pointed out that there would be a net general                   
fund loss of $43 thousand dollars.  The Department of                          
Revenue would save 400 staff hours.  The additional staff                      
time can be spent finding other tax payers who are not                         
complying with larger tax programs that bring in more money.                   
She anticipated that there would be a net gain from the                        
legislation.                                                                   
                                                                               
BOB BARTHOLOMEW, DEPUTY DIRECTOR, INCOME AND EXCISE AUDIT                      
DIVISION, DEPARTMENT OF REVENUE clarified that the                             
legislation is at the request of the Department.  He                           
observed that the Department has 17 tax programs.  The                         
Department prioritized each program based on the amount of                     
money collected and the cost of the program.  The Coin                         
Operated Devices Tax Program was at the bottom of the list.                    
The recommendation to eliminate the program was made in                        
response to budget reductions.  He asserted that the                           
Department would be able to do a better job with remaining                     
programs.                                                                      
                                                                               
Representative Davis spoke in support of the legislation.                      
                                                                               
Representative Martin MOVED to report SB 240(title                             
am)(reengrossed) out of Committee with the accompanying                        
fiscal note.  There being NO OBJECTION, it was so ordered.                     
                                                                               
SB 240(title am)(reengrossed) was REPORTED out of Committee                    
with a "do pass" recommendation and with a zero fiscal note                    
by the Department of Revenue.                                                  
ADJOURNMENT                                                                    
                                                                               
The meeting adjourned at 3:30 p.m.                                             
House Finance Committee 9 3/30/98                                              

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