Legislature(1993 - 1994)

03/11/1993 01:30 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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                     HOUSE FINANCE COMMITTEE                                   
                         MARCH 11, 1993                                        
                            1:30 P.M.                                          
                                                                               
  TAPE HFC 93 - 44, Side 2, #000 - end.                                        
  TAPE HFC 93 - 45, Side 1, #000 - end.                                        
  TAPE HFC 93 - 45, Side 2, #000 - #241.                                       
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair Ron Larson called the meeting of  the House Finance                 
  Committee to order at 1:30 P.M.                                              
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Larson               Representative Brown                           
  Co-Chair MacLean              Representative Foster                          
  Vice-Chair Hanley             Representative Grussendorf                     
  Representative Hoffman        Representative Martin                          
  Representative Navarre        Representative Parnell                         
  Representative Therriault                                                    
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Nico Bus,  Chief, Financial Services, Department  of Natural                 
  Resources;  Glenn  A.   Olds,  Commissioner,  Department  of                 
  Natural Resources; Ron Swanson, Director,  Division of Land,                 
  Department of Natural Resources; Representative  Carl Moses;                 
  C.E. Swackhammer, Deputy  Commissioner, Department of Public                 
  Safety;    Kenneth    Bischoff,   Director,    Division   of                 
  Administrative Services,  Department of Public  Safety; Col.                 
  John Murphey,  Director, Division of Alaska  State Troopers,                 
  Department  of  Public  Safety;  Jay  N.  Dulany,  Director,                 
  Division  of  Motor Vehicles,  Department of  Public Safety;                 
  Chris Christensen, Attorney, Alaska Court System.                            
                                                                               
  SUMMARY INFORMATION                                                          
  HB 55     An Act making appropriations for the operating and                 
            loan program expenses  of state government  and to                 
            capitalize funds;  and providing for  an effective                 
            date.                                                              
  HB 56     An   Act   making  appropriations   for  operating                 
            expenses for certain programs for which the  costs                 
            are derived  from mandated  formulas or  criteria,                 
            and  for expenses for certain leases and contracts                 
            for state services  and operations; and  providing                 
            for an effective date.                                             
                                                                               
            Subcommittee Closeouts:  Natural Resources                         
                                                                               
                                1                                              
                                                                               
                                                                               
                                     Public Safety                             
                                                                               
            Incorporated Subcommittee recommendations  for the                 
            Department of Natural Resources and the Department                 
            of Public Safety.                                                  
  HB 155    An Act relating to audits of health facilities.                    
                                                                               
            HB   155  was  held   in  Committee   for  further                 
            discussion.                                                        
                                                                               
  While waiting for a quorum to arrive,  Representative  Brown                 
  discussed  her concerns regarding a recent newspaper article                 
  she  read  addressing the  possibilities of  the Legislature                 
  suing the  Governor over a decision to decide the fate of $1                 
  billion dollars in oil tax settlements.                                      
  DEPARTMENT OF NATURAL RESOURCES                                              
                                                                               
  The  Department  of  Natural  Resources  (DNR)  Subcommittee                 
  consisted of Chair  Representative  Therriault with  members                 
  Representative      James,    Representative       Williams,                 
  Representative        Green,    Representative       Toohey,                 
  Representative  Davies and Representative  Carney.                           
                                                                               
  Representative    Therriault  provided  the  Committee  with                 
  handouts.    [Attachments  #1 -  #3].    He  stated the  DNR                 
  Subcommittee target was  $1.470 million  dollars with  total                 
  reductions of $1.475 million dollars.                                        
                                                                               
  Representative  Therriault explained the increment/decrement                 
  list provided by the Subcommittee, "Transaction Summary  for                 
  Governor to House", Attachment #1.                                           
                                                                               
       *    Management    and    Administration    Commissions                 
            decrement  of  $89  thousand dollars  which  would                 
            eliminate  the  Citizens  Advisory  Commission  on                 
            Federal Areas.                                                     
                                                                               
       *    Land  Development  - Resource  Development Section                 
            received a  total  decrement  of  $237.2  thousand                 
            dollars.                                                           
                                                                               
       *    Oil  & Gas Development  general fund  reduction of                 
            $102 thousand dollars.   This reduction reduces by                 
            half  the  Division's proposal  for  $205 thousand                 
            dollars.                                                           
                                                                               
       *    The Mining Development component  reduction of $45                 
            thousand dollars would eliminate an administrative                 
            position.                                                          
                                                                               
                                                                               
                                2                                              
                                                                               
                                                                               
       *    The  Geological   Development  component   reduces                 
            general funds for $118 thousand dollars.                           
                                                                               
       *    The Water Development  component program  receipts                 
            reduction  of   $300  thousand  dollars   and  the                 
            requested  $175.5  thousand  dollar increment  has                 
            been eliminated.                                                   
                                                                               
       *    The Oil and  Gas Conservation Commission component                 
            reduction   of   $52.6  eliminates   the  proposed                 
            increment  of  a   Senior  Petroleum   Engineering                 
            position.                                                          
                                                                               
       *    The  Information  Resource   Management  component                 
            received a reduction of  $110 thousand dollars  to                 
            status graphics.                                                   
                                                                               
       *    In the Parks and Recreation Management Division  -                 
            Parks Management component received a reduction of                 
            $35 thousand  dollars.  A  shift was made  of $175                 
            thousand  dollars  from  general fund  to  program                 
            receipts.                                                          
                                                                               
       *    The Agricultural Development component  received a                 
            reduction of $154.3 thousand dollars.                              
                                                                               
       *    State  Fairs  component  received a  reduction  of                 
            general  funds  $43.3  thousand  dollars.    There                 
            remains $75 thousand dollars in that component.                    
                                                                               
  Co-Chair  MacLean  referenced  Attachment   #3  "Transaction                 
  Summary  for  the House"  and  questioned the  land exchange                 
  reduction of $225.6 thousand dollars.                                        
                                                                               
  NICO BUS, CHIEF,  FINANCIAL SERVICES, DEPARTMENT OF  NATURAL                 
  RESOURCES, identified projects within  the Division of  Land                 
  presented   in  the  Governor's   amended  budget.    Actual                 
  reductions to that  Division have changed and  he offered to                 
  provide more detail at a latter date.                                        
                                                                               
  Co-Chair  MacLean   questioned  the  Capital   project  fund                 
  decrement of $335.6 thousand dollars.   Mr. Bus replied that                 
  the  Division of  Land's  budget  reflects  certain  capital                 
  projects, based on  the Governor's  original request.   This                 
  has been adjusted  and increased  in the Governor's  amended                 
  request based on the total number of capital projects.                       
                                                                               
  Co-Chair MacLean asked for further information regarding the                 
  Challenge Alaska Grant Program.   Representative  Therriault                 
  said it is an agency  which coordinates volunteers providing                 
  training to handicap skiers.                                                 
                                                                               
                                                                               
                                3                                              
                                                                               
                                                                               
  Co-Chair  MacLean  questioned  the reduction  to  State Fair                 
  Grants.  Representative  Therriault explained that all State                 
  Fair   applicants   received    a   percentage    reduction.                 
  Representative    Gail Phillips  requested  that Legislative                 
  Finance draft intent language explaining the funding levels.                 
                                                                               
                                                                               
  Representative  Hoffman stressed  his concern in  addressing                 
  resources   and  those  resource   developments.    He  drew                 
  parallels between the cuts experienced  by the Department of                 
  Fish and Game budget and those  to the Department of Natural                 
  Resources.  Mr. Bus responded,  the position count has  been                 
  adjusted  between FY  92  and  FY  93 based  on  legislative                 
  intent.                                                                      
                                                                               
  Representative    Grussendorf  referenced  the State  Forest                 
  Practices Act, pointing out that the Department to  date has                 
  not worked out the regulations for that program.                             
                                                                               
  GLENN OLDS,  COMMISSIONER, DEPARTMENT OF  NATURAL RESOURCES,                 
  responded that the Department of Fish and  Game is currently                 
  discussing the  regulations created for that Act.   There is                 
  an appeal to the Attorney  General's Office for negotiation.                 
  The   Department  of   Natural   Resources  finished   their                 
  responsibility of writing those regulations last year.                       
                                                                               
  Representative    Brown  noted  her  concern with  the  $247                 
  million dollar reduction  to general funds.  She stated that                 
  DNR is the heart of the economic development efforts for the                 
  State.   Representative   Brown  referenced  Attachment  #3,                 
  questioning  the $83.3  thousand  dollars  reduction to  the                 
  Private Mine Reclamation program receipts.   The program can                 
  not  be   implemented  without   the  collection   of  fees.                 
  Representative  Therriault  stated the fee  regulations have                 
  not yet been  approved.   The switch from  general funds  to                 
  program  receipts was made last year.  Representative  Brown                 
  advised that the cut will not save the State any money.                      
                                                                               
  Representative  Brown asked if  the reduction to the  Public                 
  Information  Center was  participated  in  jointly with  the                 
  federal government.  Representative  Therriault replied that                 
  the  Information  Center  addressed  in  the  reduction  was                 
  located in Anchorage.  Representative   Brown questioned the                 
  effect of the $360 thousand dollar reduction to that center.                 
  Mr.  Bus  stated  that  the  Public  Information  Center  is                 
  required  that  to  centralize  all  public services.    The                 
  funding  cut will  require the  operation funding  originate                 
  from the public and also program receipts.                                   
                                                                               
  Representative   Brown questioned Attachment #3, a reduction                 
  to Oil  and Gas Development  for $102 thousand  general fund                 
  dollars.   This Division  generates revenue  from which  the                 
                                                                               
                                4                                              
                                                                               
                                                                               
  State is  based.   Representative   Therriault replied  that                 
  anticipated   additional  costs   can   not  be   predicted.                 
  Representative   Brown  reiterated that  maintaining a  good                 
  lease sale schedule is difficult and felt that the increment                 
  does not include any new legislation indicated by the fiscal                 
  note.                                                                        
                                                                               
  Representative   Brown questioned  the impact  on the  Water                 
  Development component with the program receipts  reduction.                  
  Representative  Therriault stated that the Subcommittee felt                 
  they had  over estimated  program receipts.   Mr.  Bus added                 
  last  year  program  receipts   were  minimal  which  should                 
  increase in the future.                                                      
                                                                               
  Representative  Brown referenced Attachment #3, Line 16, Oil                 
  and  Gas Conservation Commission,  and questioned the effect                 
  of  the $52.6 thousand dollars reduction.   Mr. Bus replied,                 
  the  impact  will be  the elimination  of  one of  the three                 
  engineer positions.   He added, this will clearly impact the                 
  operation of the organization.                                               
                                                                               
  Representative    Brown  questioned   Line  18,  Information                 
  Resource Management  component reduction to  Status Graphics                 
  by $110 thousand dollars.   Mr. Bus stated the  impact would                 
  delete two full time positions to the agency and which would                 
  delay the updating of graphic records.                                       
                                                                               
  (Tape Change HFC 93-45, Side 1).                                             
                                                                               
  Representative   Martin  questioned the  increment  to  Fire                 
  Suppression.    Co-Chair  Larson  explained  that  the  fire                 
  suppression component would provide the necessary funds  for                 
  the  administration; the  actual determination  of the  cost                 
  would be addressed in the supplemental.  Mr. Bus stated that                 
  the  Governor's  request  for FY  94  includes  $3.7 million                 
  general fund dollars for fixed costs.  He added, the average                 
  fire suppression cost is $9.5 million dollars.                               
                                                                               
  Representative  Martin  pointed  out  his  concern  over the                 
  number  of  surveyors  employed   in  the  Land  Development                 
  component of resource development.                                           
                                                                               
  RON  SWANSON, DIRECTOR,  DIVISION  OF  LAND,  DEPARTMENT  OF                 
  NATURAL RESOURCES, said there are eleven surveyors.  Some of                 
  the survey work has  been privatized.  The applicant  now is                 
  responsible for  paying  for  the survey.    He  added,  the                 
  Division has an oversight capability with other divisions in                 
  the Department.                                                              
                                                                               
  Representative   Brown requested  clarification of the  fire                 
  suppression component.   Mr. Bus advised the  $9.117 million                 
  dollars includes $5.328 million dollars in federal funds.                    
                                                                               
                                5                                              
                                                                               
                                                                               
  Representative     Therriault  MOVED   to  incorporate   the                 
  Subcommittee's recommendations into  HB 55.  There  being NO                 
  OBJECTIONS, it was incorporated.                                             
                                                                               
  DEPARTMENT OF PUBLIC SAFETY                                                  
                                                                               
  The Department  of Public  Safety Subcommittee consisted  of                 
  Chair  Representative   Parnell with  members Representative                 
  Moses, Representative   Porter,  Representative   Mackie and                 
  Representative  Navarre.                                                     
                                                                               
  Representative     Parnell  provided   the  Committee   with                 
  handouts.    [Attachments  #4 -  #8].    He  noted that  the                 
  Subcommittee has provided  a two percent reduction  from the                 
  Governor's proposed budget.  The  total reduction was $1.785                 
  million dollars,  which is  an actual  Public Safety  budget                 
  increase  of  2.4  percent  for  the year.    Representative                 
  Parnell  provided   the  Committee   with  an   overview  of                 
  Attachment #5, "Transaction Summary for Governor to House".                  
                                                                               
       *    In the  Fish and Wildlife Protection Division, the                 
            Enforcement/Investigative   Services  received   a                 
            decrement of $10 thousand dollars.                                 
                                                                               
       *    From  that Division  in  the  Aircraft Section,  a                 
            decrement of $10 thousand dollars was taken.                       
                                                                               
       *    In the Division of Motor  Vehicles, a decrement of                 
            $350  thousand   dollars  was  taken   from  field                 
            services.  The component would delete the seasonal                 
            restorational positions.  The Division would  also                 
            receive a  $37.3 thousand dollar decrement  to the                 
            Administration.                                                    
                                                                               
       *    The  Alaska  State  Troopers Division  received  a                 
            total   decrement   of   $1.009  million   dollars                 
            consisting   of   $897.9   thousand   dollars   to                 
            Detachments,  $39.9  thousand dollars  in Criminal                 
            Investigations Bureau reducing overtime increment.                 
            The Judicial Services-Anchorage  component reduced                 
            the  overtime  increment  leaving  $21.6  thousand                 
            dollars.                                                           
                                                                               
       *    Rural  Trooper Housing  component from  the Alaska                 
            State Trooper Division received a reduction of $50                 
            thousand dollars.                                                  
                                                                               
       *    The Alaska  Police Standards  Council received  an                 
            increment of $30 thousand dollars.                                 
                                                                               
       *    The  Domestic  Violence/Sexual  Assault  component                 
                                                                               
                                6                                              
                                                                               
                                                                               
            received  a  decrement of  $300  thousand dollars.                 
            Representative  Parnell noted that currently  some                 
            money is moved from felons permanent fund dividend                 
            checks  to  other  sources.   He  stated  that the                 
            movement of funds will require a statutory change.                 
            He   emphasized  that   the  decrement   does  not                 
            represent  a  reduction for  Domestic  Violence or                 
            Sexual Assault.  It would be a source change.                      
                                                                               
       *    Commissioner's   Office   reduction   to   special                 
            services for  $35 thousand dollars.   Included  in                 
            the component  is an  increment of  $82.9 thousand                 
            dollars transfer to a Special Assistant II.                        
                                                                               
       *    The  Training Academy  received  a $33.3  thousand                 
            dollar  decrement  to  bed  replacements  for  the                 
            Police Academy.                                                    
                                                                               
       *    Administrative  Services  received a  reduction of                 
            $20 thousand dollars to the contractual account.                   
                                                                               
       *    Building  Security  Maintenance-Session   security                 
            costs decrement of $73.2 thousand  dollars.  And a                 
            reduction  to  minimum  cost  decrement  of  $20.2                 
            thousand dollars.                                                  
                                                                               
  Representative  Hoffman questioned the cuts to rural trooper                 
  housing accommodations.  He suggested that the incentive for                 
  competent troopers to relocate to rural areas is not easy.                   
                                                                               
  KENNETH  BISCHOFF,  DIRECTOR,  DIVISION   OF  ADMINISTRATIVE                 
  SERVICES, DEPARTMENT  OF PUBLIC SAFETY,  responded that  the                 
  troopers would be responsible for  finding their own housing                 
  in  rural  Alaska.    He  felt  this would  not  affect  the                 
  Department's  ability  to find  competent  troopers  for the                 
  rural area.                                                                  
                                                                               
  Representative   Martin questioned  how program  receipts in                 
  the Division  of  Motor Vehicles  were being  handled.   Mr.                 
  Bischoff stated that  the Division of Motor  Vehicles entire                 
  budget  was  based  on  program  receipts.    Representative                 
  Martin noted  that last  year, the  Division requested  $569                 
  thousand dollars in RPL's.   Representative  Parnell replied                 
  that  the cut  to  DMV seasonal  positions  caused the  most                 
  controversy.  Representative  Martin asked how NFS checks to                 
  DMV were handled.                                                            
                                                                               
  JAY DULANY, DIRECTOR, DIVISION OF MOTOR VEHICLES, DEPARTMENT                 
  OF PUBLIC  SAFETY, replied  a hold  would be  placed on  the                 
  vehicle at registration if a NFS  check had been issued.  An                 
  additional $25 dollar fee is charged  to clear the check and                 
  resume the ability to register that vehicle.                                 
                                                                               
                                7                                              
                                                                               
                                                                               
  Representative  Brown questioned the  service impacts of the                 
  $325  thousand  dollar reduction.    Mr. Dulany  stated that                 
  business increases by fifty percent  during the months April                 
  - July.   With the additional seasonal positions, the public                 
  had  a waiting  time of  up to  two hours.   Quality  public                 
  service can not be provided with a minimal staff.                            
                                                                               
  Representative    Brown  referenced  the  claims for  felons                 
  permanent fund  checks and  asked what  would happen if  the                 
  statute did not  pass.  Representative   Parnell stated that                 
  the intent of the Subcommittee would be that the funds would                 
  come out  from the  felons checks  only if  the statute  was                 
  passed.  The Department  of Revenue has given their  support                 
  for this legislation.   Co-Chair  Larson noted the  enclosed                 
  DPS  Subcommittee  House  Bill  provided.  [Attachment  #7].                 
  Representative   Brown emphasized  her concern,  that should                 
  the  bill  not  pass,  domestic  violence  not  be  reduced.                 
  Representative  Navarre  noted  the  money  would  still  be                 
  available  although  it  would  need to  be  listed  on  the                 
  dividend check.                                                              
                                                                               
  Representative  Therriault asked for further  information on                 
  the $78 thousand dollar decrement  proposed to be taken from                 
  the 470 fund.  Mr. Bischoff stated the amendment would be an                 
  RSA  with the  Alaska  State Troopers.    The Department  of                 
  Environmental  Conservation   would  provide   investigative                 
  assistance for  hazardous substance  investigation and  some                 
  dispatching services.  Representative  Therriault  suggested                 
  $20  thousand  dollars  be  backed  out of  the  dispatching                 
  services.                                                                    
                                                                               
  Representative      Martin   requested  further   discussion                 
  regarding contact jails.                                                     
                                                                               
  C.E. SWACKHAMMER, DEPUTY  COMMISSIONER, DEPARTMENT OF PUBLIC                 
  SAFETY, stated that contact jails  provide jailing for rural                 
  Alaska.  They  process nearly  eight thousand prisoners  per                 
  year,  which  places  heavy pressure  on  the  Department of                 
  Corrections.    He  added,  there  has  been  a  task  force                 
  appointed to address the concern.                                            
                                                                               
  Representative  Parnell  stated any closures of  jails would                 
  impact  the   Department   of   Corrections   and   prisoner                 
  transportation costs.                                                        
                                                                               
  Representative  Parnell MOVED  to incorporate the Department                 
  of  Public Safety  Subcommittee recommendations into  HB 55.                 
  Representative  Navarre OBJECTED.                                            
                                                                               
  A roll call vote was taken on the motion.                                    
                                                                               
                                                                               
                                8                                              
                                                                               
                                                                               
       IN FAVOR:      Hanley,   Hoffman,   Martin,    Parnell,                 
                      Therriault, Larson, MacLean.                             
                                                                               
       OPPOSED:       Grussendorf, Navarre.                                    
                                                                               
  Representative  Brown  and Representative   Foster were  not                 
  present for the vote.                                                        
                                                                               
  The MOTION PASSED, 7 - 2.                                                    
                                                                               
  The Department of Public Safety Subcommittee recommendations                 
  were incorporated into HB 55.                                                
                                                                               
  Co-Chair Larson MOVED  Attachment 7, work draft  #8-LS0784/A                 
  dated  3/4/93  be introduced  as  a House  Finance Committee                 
  substitute  bill.   There  being  NO OBJECTIONS,  it  was so                 
  ordered.                                                                     
                                                                               
  (Tape Change, HFC 93-45, Side 2).                                            
  HOUSE BILL 151                                                               
                                                                               
       "An Act  relating to  payment by  indigent persons  for                 
       legal services and related costs;  and providing for an                 
       effective date."                                                        
                                                                               
  Co-Chair  MacLean referenced  work  draft #8-LS0618\E  dated                 
  3/10/93  CSHB  151 (FIN).    She explained  the  changes the                 
  committee substitute made to HB 151.                                         
                                                                               
  Representative  Parnell asked the meaning of "cost" on  Page                 
  1, Line 9.  He thought this would narrow the amount of money                 
  which the State receives.  Co-Chair MacLean noted her intent                 
  was  to  have  the  costs  and attorney  fees  incorporated.                 
  Representative    Parnell  recommended  adding  "costs   and                 
  attorney's fees".                                                            
                                                                               
  CHRIS CHRISTENSEN, ATTORNEY, ALASKA COURT SYSTEM,  explained                 
  that the Alaska Exemption's Act lifts items which a creditor                 
  such as the State of  Alaska can not seize when it  proceeds                 
  against a debtor.   If  the State is  attempting to  recover                 
  attorney's fees from  someone who was indigent  at one time,                 
  the first $62 thousand  dollars of equity in their  home can                 
  not be touched.   The first $35 hundred dollars  of personal                 
  property,  the  first $11  hundred  dollars of  jewelry, the                 
  first $32 hundred  dollars of tools,  the first $11  hundred                 
  dollars  of pets,  the first  $35 hundred  dollars of  motor                 
  vehicles and the first $16 hundred dollars worth of cash can                 
  not be touched.                                                              
                                                                               
  Co-Chair MacLean  asked  if permanent  fund  dividends  were                 
  allowable exemptions.   Mr. Christensen stated that  the PFD                 
                                                                               
                                9                                              
                                                                               
                                                                               
  is  protected  by the  Alaska  Exemption's  Act if  it  is a                 
  private creditor.  If the creditor is a State  agency and it                 
  is a debt owed to the State, the Alaska's Exemption Act does                 
  not apply.                                                                   
                                                                               
  The Supreme Court with Civil Rule  39.5 has added a "special                 
  hardship exemption" which is an  exemption which is mandated                 
  by the U.S. Supreme Court decision from 1974.  The Court has                 
  indicated that a "formerly indigent  persons property can be                 
  taken"  as long  as it  can be  afford to be  repaid without                 
  hardship.                                                                    
                                                                               
  Co-Chair Larson MOVED to adopt the work draft dated 3/10/93.                 
  Representative  Martin  MOVED to delete  on Page 1, Line  9,                 
  and use the language of the original bill.                                   
                                                                               
  Co-Chair Larson assigned  HB 151 to subcommittee  Chaired by                 
  Representative    Hanley  and  with  members  Representative                 
  Parnell,   Representative      MacLean  and   Representative                 
  Hoffman.                                                                     
                                                                               
  HB 151 was HELD in Committee for further discussion.                         
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 3:17 P.M.                                           
                                                                               
                                                                               
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