Legislature(2003 - 2004)
05/10/2004 11:20 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
May 10, 2004
11:20 A.M.
TAPE HFC 04 - 113, Side A
CALL TO ORDER
Co-Chair Williams called the House Finance Committee meeting
to order at 11:20 A.M.
MEMBERS PRESENT
Representative John Harris, Co-Chair
Representative Bill Williams, Co-Chair
Representative Kevin Meyer, Vice-Chair
Representative Mike Chenault
Representative Eric Croft
Representative Hugh Fate
Representative Richard Foster
Representative Mike Hawker
Representative Reggie Joule
Representative Carl Moses
Representative Bill Stoltze
MEMBERS ABSENT
None
ALSO PRESENT
Anselm Staack, Chief Financial Officer, Department of
Administration; Pete Kelly, Director, State Relations,
University of Alaska; Melanie Millhorn, Director, Division
of Retirement and Benefits, Department of Administration;
Daniel Patrick Otierney, Assistant Attorney General,
Regulatory Affairs, Department of Law; Richard Schmitz,
Staff, Senator John Cowdery; Cindy Cashen, Executive
Director, Mother's Against Drunk Driving (MADD); Jason
Hooley, Staff, Senator Fred Dyson; Anthony Lombardo,
Director, Division of Public Assistance, Department of
Health & Social Services
PRESENT VIA TELECONFERENCE
Linda Wilson, Deputy Director, Alaska Public Defender
Agency, Department of Administration, Anchorage; Jay Marley,
Public Assistance Fraud Control Unit Manager, Department of
Labor & Workforce Development, Anchorage
SUMMARY
CS SB 224(STA)
An Act relating to a minor operating a vehicle
after consuming alcohol, to a minor refusing to
submit to chemical tests, and to driving during
the 24 hours after being cited for one of those
offenses; and providing for an effective date.
CS SB 224 (STA) was reported out of Committee with
"no recommendation" and with zero note #5 by the
Department of Public Safety, indeterminate note #6
by the Alaska Court System, zero note #7 by the
Department of Health & Social Services, zero note
#8 by the Department of Administration,
indeterminate note #9 by the Department of
Administration and a new note by the House Finance
Committee for the Department of Administration.
CS SB 232(FIN)
An Act relating to federal tax requirements for
and other provisions of the teachers' retirement
system, the public employees' retirement system,
and the judicial retirement system; removing
village public safety officers from the public
employees' retirement system; eliminating the
public employees' retirement system conditional
duty to refund contributions under $1,000 to
inactive employees; limiting service credit for
village public safety officer service in the
public employees' retirement system to five years;
and providing for an effective date.
CS SB 232 (FIN) was reported out of Committee with
"no recommendation" and with zero note #2 by the
Department of Administration.
CS SB 368(FIN) am
An Act relating to taxes on cigarettes and tobacco
products, to tax stamps on cigarettes, to
forfeiture of cigarettes and of property used in
the manufacture, transportation, or sale of
unstamped cigarettes, and to licenses and
licensees under the Cigarette Tax Act; and
providing for an effective date.
CS SB 368(FIN) am was SCHEDULED by not HEARD.
CS SB 376(HES) am
An Act relating to public assistance and subpoena
powers; and relating to the permanent fund
dividend and subpoena powers.
CS SB 376 (HES)am was reported out of Committee
with "no recommendation" and with fiscal note #1 &
#2 by the Department of Health & Social Services
and zero note #3 by the Department of Revenue.
SB 392 An Act relating to the expenses of investigation,
hearing, or public advocacy before the Regulatory
Commission of Alaska, to calculation of the
regulatory cost charge for public utilities and
pipeline carriers to include the Department of
Law's costs of its public advocacy function, to
inspection of certain books and records by the
attorney general when participating as a party in
a matter before the Regulatory Commission of
Alaska; and providing for an effective date.
SB 392 was reported out of Committee with "no
recommendation" and with fiscal note #3 by the
Department of Law.
CS SB 393(FIN)
An Act relating to default on tuition, fees, and
other charges of the University of Alaska and to
claims on permanent fund dividends for tuition,
fees, and other charges of the University of
Alaska that are in default.
CS SB 393(FIN) was reported out of Committee with
a "do pass" recommendation and with fiscal note #1
by the University of Alaska and fiscal note #2 by
the Department of Revenue.
CS SB 395(FIN) am
An Act authorizing the Alaska Railroad Corporation
to extend its rail line to Fort Greely, Alaska,
and relating to that extension; authorizing the
corporation to issue bonds to finance the cost of
the extension and necessary facilities and
equipment; relating to the Railroad Planning,
Platting, and Land Use Regulation Task Force; and
providing for an effective date.
CS SB 395 (FIN)am was reported out of Committee
with "individual recommendations" and with fiscal
note #2 by the Department of Community & Economic
Development.
CS FOR SENATE BILL NO. 395(FIN) am
An Act authorizing the Alaska Railroad Corporation to
extend its rail line to Fort Greely, Alaska, and
relating to that extension; authorizing the corporation
to issue bonds to finance the cost of the extension and
necessary facilities and equipment; relating to the
Railroad Planning, Platting, and Land Use Regulation
Task Force; and providing for an effective date.
Co-Chair Harris MOVED to RESCIND previous action taken on
failure to move the bill out of Committee. There being NO
OBJECTION, the action was rescinded.
Co-Chair Harris MOVED to report CS SB 395(FIN)am out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CS SB 395 (FIN)am was reported out of Committee with
"individual recommendations" and with fiscal note #2 by the
Department of Community & Economic Development.
CS FOR SENATE BILL NO. 232(FIN)
An Act relating to federal tax requirements for and
other provisions of the teachers' retirement system,
the public employees' retirement system, and the
judicial retirement system; removing village public
safety officers from the public employees' retirement
system; eliminating the public employees' retirement
system conditional duty to refund contributions under
$1,000 to inactive employees; limiting service credit
for village public safety officer service in the public
employees' retirement system to five years; and
providing for an effective date.
MELANIE MILLHORN, DIRECTOR, DIVISION OF RETIREMENT AND
BENEFITS, DEPARTMENT OF ADMINISTRATION, advised that the
proposed legislation was extremely important for the
Division and would insure tax compliance for the Public
Employees Retirement Account (PERS), Teachers Retirement
System (TERS) and the Judicial Retirement System (JRS).
Presently, there is an agreement with the Internal Revenue
Service stating that the State intends to move forward with
the legislation.
ANSELM STAACK, CHIEF FINANCIAL OFFICER, DEPARTMENT OF
ADMINISTRATION, offered to answer questions of the
Committee.
Representative Foster MOVED to report CS SB 232 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CS SB 232 (FIN) was reported out of Committee with a "no
recommendation" and with zero note #2 by the Department of
Administration.
SENATE BILL NO. 392
An Act relating to the expenses of investigation,
hearing, or public advocacy before the Regulatory
Commission of Alaska, to calculation of the regulatory
cost charge for public utilities and pipeline carriers
to include the Department of Law's costs of its public
advocacy function, to inspection of certain books and
records by the attorney general when participating as a
party in a matter before the Regulatory Commission of
Alaska; and providing for an effective date.
DANIEL PATRICK OTIERNEY, ASSISTANT ATTORNEY GENERAL,
REGULATORY AFFAIRS, DEPARTMENT OF LAW, stated that last
year's Executive Order (EO) 111 transferred the
responsibility for advocacy on behalf of the public in
utility matters before the Regulatory Commission of Alaska
(RCA) from the RCA to the attorney general, and established
the public advocacy function within the Department of Law.
As a result, the RCA personnel, historically responsible for
public advocacy, now acts under the authority and direction
of the Department. The bill completes the prior transfer of
authority by providing for execution aspects.
SB 392 clarifies that regulatory cost charge receipts (not
general fund) would continue to pay for the general costs of
public advocacy now administered by the Department, just as
the receipts historically paid for public advocacy costs
when the function was performed by RCA personnel.
The bill also adjusts the regulatory cost charge ceiling and
creates two, distinct percentages of total regulatory cost
charge receipts to separately fund the RCA and the
Department public advocacy function in order to provide each
entity with budgetary independence from the other.
Mr. Otierney advised that SB 392 would provide the
Department qualified access to utility or pipeline carrier
records similar to that afforded the RCA's former public
advocacy staff to maintain efficient and economical access
to information where the RCA has determined that
comprehensive review. Also, the bill clarifies that State
agencies are exempt from paying the allocated costs of RCA
proceedings to which the State agency is a party because
there is no net fiscal benefit to the State.
Representative Stoltze thought that the request should have
been included in the Department of Law's operating budget
request. Mr. Otierney disagreed that the request was
misplaced.
Co-Chair Harris asked if Mr. Otierney's job was "on the line
if the bill did not pass". Mr. Otierney stated it was not.
The funding source for public advocacy had already been
transferred and currently is from regulatory cost charge
receipts. In that scenario, the Department of Law's public
advocacy function is in RDU within the RCA budget and funded
from regulatory cost charge receipts. The bill provides the
appropriate independence of the budget for that function.
He added, there would be no change in the source of funding.
Co-Chair Harris inquired why the issue had not been
submitted in the Department of Law's budget. Mr. Otierney
understood that it was not a function funded out of the
general fund but rather a regulatory cost-charge.
Co-Chair Harris referenced Mr. Otierney's statement that the
request was "off-budget", pointing out that there are no
"off-budget" requests. All funds are receipts for services
and are taken into consideration. Mr. Otierney indicated
that he did not take issue to that and that he is the
"substantive guy" with the responsibility to implement the
advocacy function.
Co-Chair Harris noted that he supports the bill.
Representative Foster MOVED to report SB 392 out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
SB 392 was reported out of Committee with "no
recommendation" and with fiscal note #3 by the Department of
Law.
CS FOR SENATE BILL NO. 393(FIN)
An Act relating to default on tuition, fees, and other
charges of the University of Alaska and to claims on
permanent fund dividends for tuition, fees, and other
charges of the University of Alaska that are in
default.
PETE KELLY, DIRECTOR, STATE RELATIONS, UNIVERSITY OF ALASKA,
stated that SB 393 would add the University to the list of
exemptions for Permanent Fund dividends when there is debt
owed to the State. Currently, criteria exist in statute by
which it can be collected. The bill clarifies the purposes
of collecting bad debt from tuition and department fees. In
policy, there are protections built in notice. It is
anticipated that the legislation will allow the University
to collect approximately $400 thousand dollars this year.
To implement the legislation, the first year costs amount to
approximately $100 thousand dollars, with $40 thousand per
year used to collect the fees after that.
Representative Stoltze inquired if the only other State
agency that has the authority was the Child Support
Enforcement Agency (CSEA). Mr. Kelly pointed out language
on Page 2, Line 22, indicating how broad that statute is.
Representative Croft asked why it could not be collected
under Section (5), Page 2, Lines 18-20. He thought that the
difference between Sections #5 & #6 was that they would have
to go through the expense of small claims action to get the
judgment rather than the administrative appeals process.
Mr. Kelly agreed that was correct and that the procedures
are already in statute.
Co-Chair Harris asked if the University's Student Council
had issued an opinion. Mr. Kelly responded that it had not
yet been proposed to them. Co-Chair Harris recommended that
discussion occur.
Representative Foster MOVED to report CS SB 393 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CS SB 393 (FIN) was reported out of Committee with a "do
pass" recommendation and with fiscal note #1 by the
University of Alaska and fiscal note #2 by the Department of
Revenue.
CS FOR SENATE BILL NO. 224(STA)
An Act relating to a minor operating a vehicle after
consuming alcohol, to a minor refusing to submit to
chemical tests, and to driving during the 24 hours
after being cited for one of those offenses; and
providing for an effective date.
RICHARD SCHMITZ, STAFF, SENATOR JOHN COWDERY, explained that
SB 224 would change Alaska's law to require that stiffer
penalties apply to people under the legal drinking age after
consuming any amount of alcohol. Under current law, a
person under 21 years old, who drives with a Blood Alcohol
Content (BAC) of below .08, would receive a charge of minor
consuming and/or minor operating a vehicle after consuming,
both of which are infractions.
SB 224 applies mandatory fines and community service for
minors to drive after consuming any amount of alcohol. A
first-time offender faces a $500 fine, which increases to
$1000 for a second offense and $1500 for additional
offenses. Community service requirements increase
similarly.
Mr. Schmitz continued, drivers between the ages of 15 and 20
years old make up approximately 7% of the total driving
population. That 7% constitutes 14% of the alcohol
related fatalities. Zero tolerance laws can act as a
deterrent and dramatically help change the behavior.
CINDY CASHEN, EXECUTIVE DIRECTOR, MOTHER'S AGAINST DRUNK
DRIVING (MADD), JUNEAU, explained that currently, teenagers
are being charged with minor consuming charges. The public
defenders office has indicated that passage would increase
their workload. She thought that in reality, most of the
minor consuming charges already have the right to a public
defender, which would not significantly change. Presently,
time, the fee for such a charge is usually around $250
dollars, which to the offender is a joke.
Ms. Cashen commented that the BAC level usually create a
raise with each charge and then the person becomes familiar
with the system, becoming a high-risk driver. The bill
would detour them with the first charge at $500 dollars, the
second charge at $1000 dollars and the third at $1500
dollars. That would be an amount, which would affect the
legal guardians, providing an opportunity for them to talk
about the situation. Also, the community work service
program aspect is very important, as it would force the
teenager to work in a program that deals with the education
of treatment and intervention of alcohol abuse. Ms. Cashen
thought that it would be effective and urged that the bill
pass.
Representative Stoltze asked if the proposed change would
alter eligibility for first time youth offenders being able
to get into the Youth Corp program. Ms. Cashen understood
that 14-16 year olds would no longer be eligible for that
program.
Representative Stoltze asked if the increase in the penalty
would create any barrier to that program. Mr. Schmitz did
not know, however, understood that different municipalities
addressed that concern differently. Representative Stoltze
asked that a more definitive answer be provided before the
House Floor session discussion. Mr. Schmitz understood that
the legislation would make the student ineligible for the
Youth Corp program.
Representative Chenault asked if the legislation would only
apply to a .02 BAC. Mr. Schmitz stated that it would apply
if the person had driven within a 24-hour period after
drinking or consuming alcohol and that the BAC level would
not be the only factor considered. There would need to be
proof that the student had been consuming alcohol.
Vice Chair Meyer pointed out the indeterminate fiscal notes
and asked if the teenager would be eligible for a jury
trial. Ms. Cashen acknowledged that was correct, pointing
out that most of them are additionally charged with minor
consuming, which allows that person to qualify for a jury
trial.
Vice Chair Meyer noted that he appreciated the community
service aspect of the legislation.
Representative Fate questioned if the provision would be
waived if drinking were done at home with family. Mr.
Schmitz replied that was not included in statute. If the
person were caught drinking illegally, they would be guilty.
Ms. Cashen interjected that it is legal to give your child
alcohol.
Representative Fate reiterated his question, asking what
would happen if there was an accident. Ms. Cashen responded
that they would be charged because they were a minor and
operating a motor vehicle while under consumption.
Representative Croft asked if the "minor" as proposed in the
legislation, would be under 21 years old. Mr. Schmitz
explained that had been discussed in the House Judiciary
Committee and was a "term of art" and applies to drinking
and driving statutes. In response to Representative Croft,
Ms. Cashen added that the legislation would increase the
penalties and fines and would add mandatory community work
service.
Representative Joule asked if the community service
prevention including treatment and education would be
mandatory. Ms. Cashen responded that the community service
would be done through the schools, hopefully offering a
variety of opportunities.
Co-Chair Harris asked about the fiscal notes. Mr. Schmitz
pointed out the public defender's note that MADD does not
agree with. The original bill proposed a Class B
misdemeanor, which subsequently was removed and however, the
fiscal note did not change removing that language.
Co-Chair Harris MOVED to zero out fiscal note #10.
Representative Stoltze pointed out for the record that it is
the opinion of MADD that action would be appropriate. Ms.
Cashen acknowledged that entire court system could use more
staff, however, SB 224 would not increase the Public
Defender's workload to require another person. Co-Chair
Harris stated that the reality is, the public defender is
required by the court to represent those people and that the
agency could come back to the Legislature through the
supplemental budget request. He maintained that he would
rather face the supplemental later than to fund it at this
time.
LINDA WILSON, (TESTIFIED VIA TELECONFERENCE), DEPUTY
DIRECTOR, ALASKA PUBLIC DEFENDER AGENCY, DEPARTMENT OF
ADMINISTRATION, ANCHORAGE, commented on the fiscal note.
Currently, when a person is charged with a movack, they get
their license revoked. Requiring mandatory community work
service and increased graduated fines, will require more
prosecution in court. For a first minor consuming charge,
there would be no license action as there would be no tie in
consuming with the driving. In the past, when the
legislature changed the statute concerning minor consuming,
calling it an infraction, the minor was not to be entitled
to a court appointed council. In 2001, when that statute
changed, there were 58 cases charged with a public defender
for minor consuming. That number has mushroomed in 2003 to
892. There are three statutes now that have graduated
sanctions and mandatory community work service.
Enactment of the legislation would provide entitlement to
court appointed council and a jury trial and will require a
fair amount of public defenders. Changing it from a
misdemeanor to an infraction does not negate the entitlement
to a court appointed attorney or a jury trial because of the
mandatory community work service that is part of the bill.
She stressed that they will need at least one additional
attorney to handle the request and she urged that the fiscal
note not be zeroed out.
Co-Chair Williams OBJECTED to zeroing out the note.
Representative Croft added his objection to zeroing out the
note, stressing that it would not be an appropriate action.
He noted the usual large supplemental requests from that
agency, which does not provide an accurate picture of that
agency's on-going needs. Fiscal notes are provided to give
the State an understanding of the costs for implementing
legislation.
Co-Chair Williams WITHDREW his OBJECTION to the amendment.
There being NO further OBJECTION, the note was zeroed out.
Representative Foster MOVED to report CS SB 224 (STA) out of
Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CS SB 224 (STA) was reported out of Committee with "no
recommendation" and with zero note #5 by the Department of
Public Safety, indeterminate note #6 by the Alaska Court
System, zero note #7 by the Department of Health & Social
Services, zero note #8 by the Department of Administration,
indeterminate note #9 by the Department of Administration
and a new note by the House Finance Committee for the
Department of Administration.
CS FOR SENATE BILL NO. 376(HES) am
An Act relating to public assistance and subpoena
powers; and relating to the permanent fund dividend and
subpoena powers.
JASON HOOLEY, STAFF, SENATOR FRED DYSON, noted that SB 376
would allow the commissioners for the Department of Health &
Social Services and the Department of Revenue to issue
subpoenas to compel the production of records needed to
investigate cases of suspected fraud. The Department of
Labor & Workforce Development currently has that type of
subpoena power, as do many agencies in other states.
The Division of Public Assistant Fraud Control Unit reported
that records such as rental agreements, utility billings or
health care information are often used to verify information
provided by public assistance applicants or recipients.
Simple requests for these items often go unheeded due to
concerns about exposure to litigation. Currently, the cost
of going to court to get subpoenas for that type of record
makes investigating "smaller" fraud cases prohibitively
expensive. By allowing these departments to issue their own
subpoenas, the costs of going to court would be eliminated,
and the department could cost-effectively investigate more
cases of suspected fraud. The result will be additional
recovery of welfare overpayments. The one-person staff
working to combat Permanent Fund Dividend fraud has begun an
aggressive fraud program, aimed to assure that fraud is
identified, prosecuted, and deterred to the greatest extent
possible.
Representative Foster MOVED to report CS SB 376 (HES)am out
of Committee with individual recommendations and with the
accompanying fiscal notes.
Representative Chenault OBJECTED to make a comment. He
voiced concern with who would be in charge with the subpoena
ballot. He stated that it is important that the Legislature
indicate who they would want to see it be. Representative
Chenault WITHDREW his OBJECTION.
JAY MARLEY, (TESTIFIED VIA TELECONFERENCE), PUBLIC
ASSISTANCE FRAUD CONTROL UNIT MANAGER, DEPARTMENT OF LABOR &
WORKFORCE DEVELOPMENT, ANCHORAGE, stated that within the
Department of Labor & Workforce Development, the subpoena
power went down to the investigator level. With the number
of subpoenas currently being investigated by the Department,
it would be extremely burdensome to have to wait for the
commissioner, deputy commissioner or the deputy director of
any division's signature.
Representative Stoltze could not believe that it would be a
"burden" to get the signature of the commissioner.
ANTHONY LOMBARDO, DIRECTOR, DIVISION OF PUBLIC ASSISTANCE,
DEPARTMENT OF HEALTH & SOCIAL SERVICES, noted that there had
been discussion in the Senate regarding potential abuse. As
a result, there was language proposed by Senator French that
it be limited to the commissioner's or director's level.
Essentially, the decisions need to be made on an executive
level where there is some accountability in the issuance.
Department of Health & Social Services agreed that would be
an appropriate limitation.
There being NO further OBJECTION, CS SB 376 (HES)am was
reported out of Committee with "no recommendation" and with
fiscal note #1 & #2 by the Department of Health & Social
Services and zero note #3 by the Department of Revenue.
ADJOURNMENT
The meeting was adjourned at 12:08 P.M.
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