Legislature(1993 - 1994)

05/05/1993 01:00 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                                                                               
                     HOUSE FINANCE COMMITTEE                                   
                           MAY 5, 1993                                         
                            1:00 P.M.                                          
                                                                               
  TAPE HFC 93 - 129, Side 1, #000 - end.                                       
  TAPE HFC 93 - 129, Side 2, #000 - end.                                       
  TAPE HFC 93 - 130, Side 1, #000 - end.                                       
  TAPE HFC 93 - 130, Side 2, #000 - #283.                                      
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair Ron Larson called the meeting of the House  Finance                 
  Committee to order at 1:00 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                                                                 
                                                                               
  Bruce Campbell, Commissioner,  Department of  Transportation                 
  and Public Facilities; Annette Kreitzer, Aide, Senator Loren                 
  Leman;  Representative  Tom   Brice;  Representative   Jerry                 
  Mackie;  David   Williams,  Planner,  Division   of  Medical                 
  Assistance, Department of Health  and Social Services; Mitch                 
  Gravo, Northern  Air Cargo, Anchorage,  Alaska; Chris Gates,                 
  Director,  Division of  Economic Development,  Department of                 
  Commerce  and  Economic Development;  Senator  George Jacko;                 
  Paul Fuhs, Commissioner, Department of Commerce and Economic                 
  Development.                                                                 
                                                                               
  SUMMARY INFORMATION                                                          
  SB 91     An Act providing for  coverage of midwife services                 
            under   Medicaid;   reordering  the   priority  of                 
            optional  services  provided  by the  state  under                 
            Medicaid; and providing for an effective date.                     
                                                                               
            CS SS SB 91  was reported out of Committee  with a                 
            "do  pass"  recommendation and  with  three fiscal                 
            notes  by  the  Department of  Health  and  Social                 
            Services dated 3/22/93.                                            
  SB 142    An Act  relating to  the Alaska regional  economic                 
            assistance program; and providing for an effective                 
            date.                                                              
                                                                               
                                1                                              
                                                                               
                                                                               
            HCS CS SB 142 (FIN)  was reported out of Committee                 
            with "no recommendation" and with a fiscal note by                 
            the Senate Finance Committee dated 4/08/93.                        
  SB 154    An  Act relating to the economic development grant                 
            program; and providing for an effective date.                      
                                                                               
            SB   154  was  held   in  Committee   for  further                 
            discussion.                                                        
  SB 198    An  Act   exempting  certain  activities   of  the                 
            Department of Transportation and Public Facilities                 
            from    the    regulation   provisions    of   the                 
            Administrative  Procedure  Act and  allowing other                 
            procedures for those activities; and providing for                 
            an effective date.                                                 
                                                                               
            SB  198  was reported  out  of Committee  with "no                 
            recommendation" and with a zero fiscal note by the                 
            Department  of Health  and  Social Services  dated                 
            4/18/93.                                                           
  SENATE BILL 91                                                               
                                                                               
       "An  Act providing  for  coverage  of midwife  services                 
       under  Medicaid; reordering  the  priority of  optional                 
       services  provided  by the  state  under  Medicaid; and                 
       providing for an effective date."                                       
                                                                               
  ANNETTE KREITZER,  AIDE, SENATOR LOREN LEMAN,  commented the                 
  legislation would add certified direct entry midwives to the                 
  optional services covered by Medicaid.   At least 42% of the                 
  pregnant women in  Alaska are  eligible for  Medicaid.   The                 
  bill allows those women to use midwifery services instead of                 
  mandating that they  use clinics  or hospitals for  birthing                 
  services.    In expanding  the  options for  using midwifery                 
  services for  births, the  State will  stretch its  Medicaid                 
  dollars.                                                                     
                                                                               
  Representative  Hanley questioned the savings expected to be                 
  incurred.   Representative Therriault acknowledged  that the                 
  shift in midwife care would be for women who otherwise would                 
  go to the hospital  which would create greater costs  to the                 
  State than those opting for home delivery.                                   
                                                                               
  DAVID  WILLIAMS, PLANNER,  DIVISION  OF MEDICAL  ASSISTANCE,                 
  DEPARTMENT OF HEALTH AND SOCIAL SERVICES, commented that one                 
  hundred twenty-five Medicaid eligible women  would be giving                 
  birth each  year.   Of the  eligible women,  sixty of  those                 
  would   be  shifted  away   from  hospital  physician  costs                 
  indicated by the fiscal  note.  He pointed out,  the service                 
                                                                               
                                2                                              
                                                                               
                                                                               
  appeals  to  many  women  who  reject  the  current  system.                 
  Representative  Therriault  asked  if  there  were  Medicaid                 
  eligible women who do not use hospital services because they                 
  do not want  the physician  care.  Mr.  Williams said  there                 
  are.                                                                         
                                                                               
  Mr. Williams  added, women  who choose  the midwife  service                 
  will save  costs because  of the  preventative and  up-front                 
  prenatal care  the  child receives.   Representative  Hanley                 
  reiterated concerns with long term costs.                                    
                                                                               
  Representative   Brown  asked   if  midwife   services  were                 
  considered to be optional or mandatory.  Mr. Williams stated                 
  that the  intent language  recommends that  all services  be                 
  kept active with the funding available, although the service                 
  is optional with the alternatives available.                                 
                                                                               
  Representative Parnell MOVED to report CS SS SB 91 (HES) out                 
  of Committee  with individual  recommendations and  with the                 
  accompanying fiscal notes.  There being NO OBJECTION, it was                 
  so ordered.                                                                  
                                                                               
  CS SS SB 91 (HES) was  reported out of Committee with a  "do                 
  pass"  recommendation  and with  three  fiscal notes  by the                 
  Department of Health and Social Services dated 3/22/93.                      
  SENATE BILL 198                                                              
                                                                               
       "An Act  exempting certain activities of the Department                 
       of  Transportation  and   Public  Facilities  from  the                 
       regulation provisions of  the Administrative  Procedure                 
       Act and allowing other procedures for those activities;                 
       and providing for an effective date."                                   
                                                                               
  BRUCE CAMPBELL, COMMISSIONER,  DEPARTMENT OF  TRANSPORTATION                 
  AND PUBLIC FACILITIES, stated based on the court decision in                 
  the  rural  airport  landing  fee  lawsuit,   Anchorage  and                 
  Fairbanks (FIA)  International Airports  may be  required to                 
  establish all fees  and fee  changes through the  regulatory                 
  process defined in the Administrative Procedures Act.                        
                                                                               
  AIA and FIA establish landing fees, terminal rent, and other                 
  airline  fees  through uniform  Airline  Operating Agreement                 
  formulas  negotiated  with  the  airlines  serving  the  two                 
  airports.                                                                    
                                                                               
  Representative Hoffman asked the  changes intended for rural                 
  airports.   Commissioner Campbell stated that those proposed                 
  regulations  have  been  discussed   in  the  Administrative                 
  Procedures Act.                                                              
                                                                               
  Representative Foster  provided the Committee with  a letter                 
                                                                               
                                3                                              
                                                                               
                                                                               
  from  Northern  Air  Cargo, Inc.  (NAC).    [Attachment #3].                 
  Commissioner  Campbell  replied  he  had  responded to  that                 
  letter addressing the word changes.   [Attachment #1 &  #2].                 
  He offered to  provide a "Letter  of Intent" addressing  the                 
  legislative enforcement.                                                     
                                                                               
  Representative Grussendorf asked if the proposed legislation                 
  was prepared because previous  DOTPF Commissioner's did  not                 
  follow  the Administrative  Procedures Act  and consequently                 
  were  sued.    Commissioner Campbell  replied  the  Attorney                 
  General  thought  the  legislation  was  necessary  or   the                 
  possibility  that the State  would be  subject to  law suits                 
  from   any   party  who   had   established  rates   at  the                 
  international   airports    under   previous    regulations.                 
  Representative    Grussendorf    pointed   out    that   the                 
  international airports would be exempt from the act.                         
                                                                               
  Commissioner Campbell noted there would be no increased fees                 
  resulting from the  implementation of  the legislation.   He                 
  added, the State  was sued because  it had not followed  the                 
  Administrative Procedures  Act.   Currently, no  one is  due                 
  money from the international airport.                                        
                                                                               
  Co-Chair MacLean asked if adequate  public hearings had been                 
  scheduled for the bill.  Commissioner Campbell replied there                 
  would be a new  newspaper add running for three  weeks prior                 
  to the  public hearings.   Representative  MacLean asked  if                 
  fees   would   be  established   for  the   rural  carriers.                 
  Commissioner Campbell  stated  the  legislation  would  only                 
  affect   the  international   airports   in  Anchorage   and                 
  Fairbanks.  He  added, the  Department could establish  fees                 
  under A.P.A.                                                                 
                                                                               
  Representative  Hoffman  asked   who  was  responsible   for                 
  establishing the fees.   Commissioner Campbell replied,  law                 
  defines that fees be set by order of the Commissioner.                       
                                                                               
  (Tape Change, HFC 93-129, Side 2).                                           
                                                                               
  MITCH GRAVO,  NORTHERN AIR  CARGO, INC.,  ANCHORAGE, ALASKA,                 
  commented  on  a   concern  in  the   legislation  regarding                 
  litigation  on  the  rural airports  and  the  authority the                 
  Commissioner is given.   He feared that persons  not subject                 
  to  litigation would have their rates  and fees increased to                 
  make  up  for  the decrease  resulting  from  the judgement.                 
  Commissioner Campbell explained the money paid in  judgments                 
  to  the  carriers   would  be   subject  to  a   legislative                 
  appropriation.                                                               
                                                                               
  Representative Brown questioned the relationship between the                 
  international and the rural airports finances.  Commissioner                 
  Campbell pointed out  they are separate.   The international                 
                                                                               
                                4                                              
                                                                               
                                                                               
  airports operate  from a  revolving fund,  with the  landing                 
  fees  and  the  charges  to   those  airports  pay  for  the                 
  operation.                                                                   
                                                                               
  Representative  Foster  MOVED  to  report   SB  198  out  of                 
  Committee   with   individual   recommendations    and   the                 
  accompanying fiscal note.  There being  NO OBJECTION, it was                 
  so ordered.                                                                  
                                                                               
  SB   198   was   reported   out   of  Committee   with   "no                 
  recommendation"  and  with   a  zero  fiscal  note   by  the                 
  Department  of Transportation  and  Public Facilities  dated                 
  4/18/93.                                                                     
  SENATE BILL 142                                                              
                                                                               
       "An  Act  relating  to  the  Alaska  regional  economic                 
       assistance  program;  and  providing for  an  effective                 
       date."                                                                  
                                                                               
  Representative   Hanley  provided   the  Committee   with  a                 
  sectional  analysis  of  SB  142.    [Attachment  #4].    He                 
  suggested a  "floating" match rate to be itemized within the                 
  legislation.                                                                 
                                                                               
  CHRIS  GATES, DIRECTOR,  DIVISION  OF ECONOMIC  DEVELOPMENT,                 
  DEPARTMENT  OF COMMERCE  AND  ECONOMIC DEVELOPMENT,  assured                 
  Representative  Hanley  that there  would be  no string-free                 
  grants in the legislation.   Match amounts will be required.                 
                                                                               
                                                                               
  Representative Hanley provided the Committee with  Amendment                 
  Gates noted DCED would be comfortable with the amendment.                    
                                                                               
  Representative  Martin  noted  his concern  with  the fiscal                 
  impact of  the bill.   Mr.  Gates stated a  new fiscal  note                 
  could  be  established by  the  Committee.   He  added,  the                 
  Department would  like  to fully  fund each  of the  fifteen                 
  Regional   Development   Organizations  (ARDOR's)   at  $100                 
  thousand dollars although they are willing to negotiate.                     
                                                                               
  Co-Chair MacLean asked the difference between  SB 154 and SB                 
  142.  Mr.  Gates replied that SB 154 is a capital grant bill                 
  which allows the Legislature to  establish certain money for                 
  proper economic  development grant projects  which must meet                 
  six criteria for  job placement and economic  activity.  The                 
  funding would be for one person per area and would not cover                 
  any project development.                                                     
                                                                               
  Mr. Gates commented on  the two fiscal notes.   The original                 
  fiscal note requested  by the  Department was $750  thousand                 
                                                                               
                                5                                              
                                                                               
                                                                               
  dollars.   The Senate Finance  Committee reduced the note to                 
  $250  thousand dollars.   There  is a  requirement for  cash                 
  matches, although in-kind  matches have been accepted.   Mr.                 
  Gates  advised that  there  is Federal  Economic Development                 
  Administration money available to administrate the  program.                 
  Some ARDOR's not having a functioning board of director's in                 
  the local region have been decertified.                                      
                                                                               
  Representative  Brown  asked if  there  have been  any civil                 
  lawsuits involving ARDOR's.  Mr. Gates replied there has not                 
  been  any  lawsuits  against  any  board  members  to  date.                 
  Representative Brown noted her  concern that the legislation                 
  does have private goals and it also works hand-in-hand  with                 
  private industry.  Mr.  Gates reiterated, the fear of  being                 
  sued has motivated many ARDOR's to make careful decision.                    
                                                                               
  Representative Hanley MOVED Amendment #1.                                    
                                                                               
  (Tape Change, HFC 93-130, Side 1).                                           
                                                                               
  Representative Brown MOVED a language change to Page 2, Line                 
  15 and Line  20.  She recommended deleting on  Line 15, "for                 
  the project" and on Line 19-20, deletion of the language "to                 
  be used for the project".  Mr. Gates noted the amendment was                 
  acceptable.   Representative Brown MOVED  to amend Amendment                 
  being NO  OBJECTION  to the  amended  Amendment #1,  it  was                 
  adopted.                                                                     
                                                                               
  Representative  Foster MOVED to  report HCS CS  SB 142 (FIN)                 
  out of  Committee with  individual recommendations  and with                 
  the accompanying  fiscal note.  There being NO OBJECTION, it                 
  was so ordered.                                                              
                                                                               
  Representative Navarre  MOVED to  amend the  fiscal note  to                 
  $500 thousand dollars.                                                       
                                                                               
  SENATOR GEORGE JACKO commented that the $250 thousand dollar                 
  fiscal  note would  be  sufficient.   Representative Navarre                 
  WITHDREW THE MOTION.   There being  NO OBJECTION, it was  so                 
  ordered.                                                                     
                                                                               
  HCS CS SB 142 (FIN) was  reported out of Committee with  "no                 
  recommendation" and with a fiscal note by the Senate Finance                 
  Committee dated 4/08/93.                                                     
  SENATE BILL 154                                                              
                                                                               
       "An  Act  relating to  the  economic  development grant                 
       program; and providing for an effective date."                          
                                                                               
  Mr.  Gates  stated that  CSSB  154 establishes  the Economic                 
                                                                               
                                6                                              
                                                                               
                                                                               
  Development  Grant Program  and places  directly  in statute                 
  specific economic criteria that municipalities and  Regional                 
  Development Organizations (ARDOR's) must meet in order to be                 
  eligible.  The Office of Management  and Budget will form an                 
  evaluation  committee with  the Department  of Commerce  and                 
  Economic  Development (DCED) and the Department of Community                 
  and Regional Affairs (DCRA) and other agencies to prioritize                 
  the projects.  The amended version of the bill replaces DCED                 
  as   the  administering  agency   with  the   Department  of                 
  Administration (DOA).                                                        
                                                                               
  The  program  creates  an   competitive  approach  in  which                 
  projects  are  prioritized.    Discussion  followed  between                 
  Representative  Navarre  and Mr.  Gates regarding  the grant                 
  fund appropriation and the prioritized list.  Representative                 
  Navarre felt the proposed program was a duplication of other                 
  legislation.   Mr.  Gates  replied there  are gaps  in other                 
  proposed project  legislation.  Co-Chair  Larson agreed with                 
  Representative Navarre.  Mr. Gates stated the legislation is                 
  not a matching grant, and there should be no match required.                 
                                                                               
                                                                               
  Representative  Brown   did  not   understand  the   project                 
  feasibility.    She  recommended  adding  a  requirement  to                 
  indicate the economic  feasibility of the legislation.   The                 
  criteria  submitted would  be  used to  rank rather  than to                 
  match.  Mr. Gates disagreed with Representative Brown.                       
                                                                               
  SENATOR GEORGE JACKO  stated that an intent  letter had been                 
  exchanged between  the  House and  Senate Finance  Co-Chairs                 
  indicating criteria  used for  the legislation.   Mr.  Gates                 
  explained the fund at DCED is a matching grant fund for non-                 
  profit organizations which  requires a match.   The proposed                 
  legislation  does  not  require  a  catch match.    Economic                 
  development projects can  be funded without the  requirement                 
  for a match although one of the criteria is to determine how                 
  much money  is being  brought in  from other  sources.   The                 
  primary difference between the two is the match requirement.                 
                                                                               
                                                                               
  Representative  Parnell  asked if  a  match requirement  was                 
  imposed on the  legislation, would the purpose  be defeated.                 
  Senator  Jacko  replied,  the   established  criteria  would                 
  require  that a match be provided  by local participation in                 
  the project.   Co-Chair MacLean pointed out that  within the                 
  Senate capital budget, $15 million dollars worth of economic                 
  matching grant monies  are available.   Mr. Gates added each                 
  project on the list have match components.                                   
                                                                               
  Representative Brown  suggested that  taxes and other  costs                 
  imposed to the  State should be  indicated.  She asked  that                 
  specified  criteria  be  required.     Representative  Brown                 
                                                                               
                                7                                              
                                                                               
                                                                               
  recommended   to   continue  funding   economic  development                 
  projects   already  in  place   rather  than  beginning  new                 
  programs.  Senator Jacko said his intention was to establish                 
  a  better  system  with   the  Administration's  assistance.                 
  Representative   Brown   asked   why   the   Department   of                 
  Administration  was chosen  to be  the lead  agency for  the                 
  proposed legislation.                                                        
                                                                               
  (Tape Change, HFC 93-130, Side 2).                                           
                                                                               
  Mr. Gates replied  that DOA  currently administer's all  the                 
  paper work and could insure a consistent process.                            
                                                                               
  Representative Martin noted  concern with the criteria  used                 
  to determine  the projects  and felt  that the  unemployment                 
  status of an area  should be emphasized.  Mr.  Gates replied                 
  ranking the projects was not prioritized.                                    
                                                                               
  PAUL FUHS, COMMISSIONER, DEPARTMENT OF COMMERCE AND ECONOMIC                 
  DEVELOPMENT, stated  there are  "ready"  grants and  "small"                 
  grants   in   economic  development   which  are   used  for                 
  feasibility studies.  The proposed  legislation is meant for                 
  the large scale projects which are not indicated in the rest                 
  of the budget.                                                               
                                                                               
  Representative Brown asked how the  projects differ from the                 
  existing process complied  in the Governor's  capital budget                 
  for statewide economic  development projects.   Commissioner                 
  Fuhs stated  the difference is  that SB 154  establishes six                 
  criteria which are to be used by the Legislature to evaluate                 
  the projects.                                                                
                                                                               
  CS SB 154 (L&C)(efd  fld) was HELD in Committee  for further                 
  consideration.                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 3:10 P.M.                                           
                                                                               
                                                                               
                     HOUSE FINANCE COMMITTEE                                   
                           MAY 5, 1993                                         
                            1:00 P.M.                                          
                                                                               
  TAPE HFC 93 - 129, Side 1, #000 - end.                                       
  TAPE HFC 93 - 129, Side 2, #000 - end.                                       
  TAPE HFC 93 - 130, Side 1, #000 - end.                                       
  TAPE HFC 93 - 130, Side 2, #000 - #283.                                      
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair Ron Larson called the meeting  of the House Finance                 
                                                                               
                                8                                              
                                                                               
                                                                               
  Committee to order at 1:00 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                                                                 
                                                                               
  Bruce Campbell, Commissioner,  Department of  Transportation                 
  and Public Facilities; Annette Kreitzer, Aide, Senator Loren                 
  Leman;  Representative  Tom   Brice;  Representative   Jerry                 
  Mackie;  David   Williams,  Planner,  Division   of  Medical                 
  Assistance, Department of Health and Social Services;  Mitch                 
  Gravo, Northern  Air Cargo, Anchorage, Alaska;  Chris Gates,                 
  Director, Division  of Economic  Development, Department  of                 
  Commerce  and Economic  Development;  Senator George  Jacko;                 
  Paul Fuhs, Commissioner, Department of Commerce and Economic                 
  Development.                                                                 
                                                                               
  SUMMARY INFORMATION                                                          
                                                                               
  SB 91     An  Act providing for coverage of midwife services                 
            under   Medicaid;   reordering  the   priority  of                 
            optional services  provided  by  the  state  under                 
            Medicaid; and providing for an effective date.                     
                                                                               
            CS SS SB 91  was reported out of Committee  with a                 
            "do  pass" recommendation  and  with three  fiscal                 
            notes by  the  Department  of  Health  and  Social                 
            Services dated 3/22/93.                                            
                                                                               
  SB 142    An  Act relating to  the Alaska  regional economic                 
            assistance program; and providing for an effective                 
            date.                                                              
                                                                               
            HCS CS  SB 142 (FIN) was reported out of Committee                 
            with "no recommendation" and with a fiscal note by                 
            the Senate Finance Committee dated 4/08/93.                        
                                                                               
  SB 154    An Act relating to  the economic development grant                 
            program; and providing for an effective date.                      
                                                                               
            SB   154  was   held  in  Committee   for  further                 
            discussion.                                                        
                                                                               
  SB 198    An  Act   exempting  certain  activities   of  the                 
            Department of Transportation and Public Facilities                 
                                                                               
                                9                                              
                                                                               
                                                                               
            from    the    regulation   provisions    of   the                 
            Administrative  Procedure  Act and  allowing other                 
            procedures for those activities; and providing for                 
            an effective date.                                                 
                                                                               
            SB  198  was reported  out  of Committee  with "no                 
            recommendation" and with a zero fiscal note by the                 
            Department  of Health  and  Social Services  dated                 
            4/18/93.                                                           
                                                                               
  SENATE BILL 91                                                               
                                                                               
       "An  Act  providing for  coverage  of midwife  services                 
       under  Medicaid; reordering  the  priority of  optional                 
       services  provided  by  the state  under  Medicaid; and                 
       providing for an effective date."                                       
                                                                               
  ANNETTE KREITZER,  AIDE, SENATOR LOREN  LEMAN, commented the                 
  legislation would add certified direct entry midwives to the                 
  optional services covered by Medicaid.   At least 42% of the                 
  pregnant  women in Alaska  are eligible  for Medicaid.   The                 
  bill allows those women to use midwifery services instead of                 
  mandating that they  use clinics  or hospitals for  birthing                 
  services.    In expanding  the  options for  using midwifery                 
  services for  births, the  State will  stretch its  Medicaid                 
  dollars.                                                                     
                                                                               
  Representative Hanley questioned the savings  expected to be                 
  incurred.   Representative Therriault acknowledged  that the                 
  shift in midwife care would be for women who otherwise would                 
  go to the hospital  which would create greater costs  to the                 
  State than those opting for home delivery.                                   
                                                                               
  DAVID  WILLIAMS,  PLANNER, DIVISION  OF  MEDICAL ASSISTANCE,                 
  DEPARTMENT OF HEALTH AND SOCIAL SERVICES, commented that one                 
  hundred twenty-five  Medicaid eligible women would be giving                 
  birth each  year.   Of the  eligible women,  sixty of  those                 
  would  be   shifted  away  from  hospital   physician  costs                 
  indicated by the fiscal  note.  He pointed out,  the service                 
  appeals  to  many  women  who  reject  the  current  system.                 
  Representative  Therriault  asked  if  there  were  Medicaid                 
  eligible women who do not use hospital services because they                 
  do not want  the physician  care.  Mr.  Williams said  there                 
  are.                                                                         
                                                                               
  Mr. Williams  added, women  who choose  the midwife  service                 
  will save  costs because  of the  preventative and  up-front                 
  prenatal care  the child  receives.   Representative  Hanley                 
  reiterated concerns with long term costs.                                    
                                                                               
  Representative   Brown  asked   if  midwife   services  were                 
  considered to be optional or mandatory.  Mr. Williams stated                 
                                                                               
                               10                                              
                                                                               
                                                                               
  that the  intent language  recommends that  all services  be                 
  kept active with the funding available, although the service                 
  is optional with the alternatives available.                                 
                                                                               
  Representative Parnell MOVED to report CS SS SB 91 (HES) out                 
  of  Committee with  individual recommendations and  with the                 
  accompanying fiscal notes.  There being NO OBJECTION, it was                 
  so ordered.                                                                  
                                                                               
  CS SS SB 91  (HES) was reported out of Committee  with a "do                 
  pass"  recommendation  and with  three  fiscal notes  by the                 
  Department of Health and Social Services dated 3/22/93.                      
                                                                               
  SENATE BILL 198                                                              
                                                                               
       "An Act exempting certain activities of  the Department                 
       of  Transportation  and  Public  Facilities  from   the                 
       regulation provisions of  the Administrative  Procedure                 
       Act and allowing other procedures for those activities;                 
       and providing for an effective date."                                   
                                                                               
  BRUCE CAMPBELL, COMMISSIONER,  DEPARTMENT OF  TRANSPORTATION                 
  AND PUBLIC FACILITIES, stated based on the court decision in                 
  the  rural  airport  landing   fee  lawsuit,  Anchorage  and                 
  Fairbanks (FIA)  International Airports may  be required  to                 
  establish all fees  and fee  changes through the  regulatory                 
  process defined in the Administrative Procedures Act.                        
                                                                               
  AIA and FIA establish landing fees, terminal rent, and other                 
  airline  fees through  uniform  Airline Operating  Agreement                 
  formulas  negotiated  with  the  airlines  serving  the  two                 
  airports.                                                                    
                                                                               
  Representative  Hoffman asked the changes intended for rural                 
  airports.  Commissioner Campbell stated  that those proposed                 
  regulations  have  been   discussed  in  the  Administrative                 
  Procedures Act.                                                              
                                                                               
  Representative Foster  provided the Committee  with a letter                 
  from  Northern  Air  Cargo, Inc.  (NAC).    [Attachment #3].                 
  Commissioner Campbell  replied  he  had  responded  to  that                 
  letter addressing the  word changes.  [Attachment  #1 & #2].                 
  He offered to  provide a "Letter  of Intent" addressing  the                 
  legislative enforcement.                                                     
                                                                               
  Representative Grussendorf asked if the proposed legislation                 
  was prepared  because previous DOTPF Commissioner's  did not                 
  follow  the Administrative  Procedures Act  and consequently                 
  were  sued.    Commissioner  Campbell replied  the  Attorney                 
  General  thought   the  legislation  was  necessary  or  the                 
  possibility that  the State  would be  subject to  law suits                 
  from   any   party  who   had   established  rates   at  the                 
                                                                               
                               11                                              
                                                                               
                                                                               
  international   airports    under   previous    regulations.                 
  Representative    Grussendorf    pointed   out    that   the                 
  international airports would be exempt from the act.                         
                                                                               
  Commissioner Campbell noted there would be no increased fees                 
  resulting from the  implementation of  the legislation.   He                 
  added, the State  was sued because  it had not followed  the                 
  Administrative Procedures  Act.   Currently, no  one is  due                 
  money from the international airport.                                        
                                                                               
  Co-Chair MacLean asked if adequate  public hearings had been                 
  scheduled for the bill.  Commissioner Campbell replied there                 
  would be a new  newspaper add running for three  weeks prior                 
  to the  public hearings.   Representative  MacLean asked  if                 
  fees   would  be   established  for   the   rural  carriers.                 
  Commissioner  Campbell  stated  the  legislation would  only                 
  affect   the  international   airports   in  Anchorage   and                 
  Fairbanks.  He  added, the  Department could establish  fees                 
  under A.P.A.                                                                 
                                                                               
  Representative  Hoffman   asked  who  was   responsible  for                 
  establishing the fees.   Commissioner Campbell replied,  law                 
  defines that fees be set by order of the Commissioner.                       
                                                                               
  (Tape Change, HFC 93-129, Side 2).                                           
                                                                               
  MITCH  GRAVO, NORTHERN  AIR CARGO, INC.,  ANCHORAGE, ALASKA,                 
  commented  on  a   concern  in  the  legislation   regarding                 
  litigation  on  the  rural airports  and  the  authority the                 
  Commissioner is given.  He  feared that persons not  subject                 
  to litigation  would have their rates and  fees increased to                 
  make  up  for  the decrease  resulting  from  the judgement.                 
  Commissioner Campbell explained the  money paid in judgments                 
  to  the  carriers   would  be   subject  to  a   legislative                 
  appropriation.                                                               
                                                                               
  Representative Brown questioned the relationship between the                 
  international and the rural airports finances.  Commissioner                 
  Campbell pointed out  they are separate.   The international                 
  airports operate  from a  revolving fund,  with the  landing                 
  fees  and   the  charges  to  those  airports  pay  for  the                 
  operation.                                                                   
                                                                               
  Representative  Foster  MOVED  to  report   SB  198  out  of                 
  Committee   with   individual   recommendations    and   the                 
  accompanying fiscal note.   There being NO OBJECTION, it was                 
  so ordered.                                                                  
                                                                               
  SB   198   was   reported   out   of  Committee   with   "no                 
  recommendation"  and  with   a  zero  fiscal  note   by  the                 
  Department  of Transportation  and  Public Facilities  dated                 
  4/18/93.                                                                     
                                                                               
                               12                                              
                                                                               
                                                                               
  SENATE BILL 142                                                              
                                                                               
       "An  Act  relating  to  the  Alaska  regional  economic                 
       assistance program;  and  providing  for  an  effective                 
       date."                                                                  
                                                                               
  Representative  Hanley   provided  the   Committee  with   a                 
  sectional  analysis  of  SB  142.    [Attachment  #4].    He                 
  suggested a "floating"  match rate to be itemized within the                 
  legislation.                                                                 
                                                                               
  CHRIS  GATES,  DIRECTOR, DIVISION  OF  ECONOMIC DEVELOPMENT,                 
  DEPARTMENT  OF COMMERCE  AND  ECONOMIC DEVELOPMENT,  assured                 
  Representative  Hanley that  there would  be  no string-free                 
  grants in the legislation.  Match  amounts will be required.                 
                                                                               
                                                                               
  Representative Hanley provided the  Committee with Amendment                 
  Gates noted DCED would be comfortable with the amendment.                    
                                                                               
  Representative Martin  noted  his concern  with  the  fiscal                 
  impact of  the bill.   Mr. Gates  stated a  new fiscal  note                 
  could  be  established  by the  Committee.    He added,  the                 
  Department  would like  to  fully fund  each of  the fifteen                 
  Regional   Development   Organizations  (ARDOR's)   at  $100                 
  thousand dollars although they are willing to negotiate.                     
                                                                               
  Co-Chair MacLean asked the difference between SB  154 and SB                 
  142.  Mr. Gates replied that SB  154 is a capital grant bill                 
  which allows the Legislature to  establish certain money for                 
  proper economic  development grant projects which  must meet                 
  six criteria for job  placement and economic activity.   The                 
  funding would be for one person per area and would not cover                 
  any project development.                                                     
                                                                               
  Mr. Gates commented on  the two fiscal notes.   The original                 
  fiscal note requested  by the  Department was $750  thousand                 
  dollars.   The Senate Finance Committee reduced  the note to                 
  $250 thousand  dollars.   There is  a  requirement for  cash                 
  matches, although in-kind  matches have been accepted.   Mr.                 
  Gates  advised that  there is  Federal  Economic Development                 
  Administration money available to administrate the  program.                 
  Some ARDOR's not having a functioning board of director's in                 
  the local region have been decertified.                                      
                                                                               
  Representative  Brown  asked if  there  have been  any civil                 
  lawsuits involving ARDOR's.  Mr. Gates replied there has not                 
  been  any  lawsuits  against  any  board  members  to  date.                 
  Representative Brown noted her concern that  the legislation                 
  does have private goals and it  also works hand-in-hand with                 
                                                                               
                               13                                              
                                                                               
                                                                               
  private  industry.  Mr. Gates  reiterated, the fear of being                 
  sued has motivated many ARDOR's to make careful decision.                    
                                                                               
  Representative Hanley MOVED Amendment #1.                                    
                                                                               
  (Tape Change, HFC 93-130, Side 1).                                           
                                                                               
  Representative Brown MOVED a language change to Page 2, Line                 
  15 and Line 20.   She recommended deleting on  Line 15, "for                 
  the project" and on Line 19-20, deletion of the language "to                 
  be used for the project".  Mr. Gates noted the amendment was                 
  acceptable.   Representative Brown MOVED to  amend Amendment                 
  being  NO OBJECTION  to  the amended  Amendment  #1, it  was                 
  adopted.                                                                     
                                                                               
  Representative Foster  MOVED to report  HCS CS SB  142 (FIN)                 
  out of  Committee with individual  recommendations and  with                 
  the accompanying fiscal  note.  There being NO OBJECTION, it                 
  was so ordered.                                                              
                                                                               
  Representative Navarre  MOVED to  amend the  fiscal note  to                 
  $500 thousand dollars.                                                       
                                                                               
  SENATOR GEORGE JACKO commented that the $250 thousand dollar                 
  fiscal  note would  be sufficient.   Representative  Navarre                 
  WITHDREW THE MOTION.   There being  NO OBJECTION, it was  so                 
  ordered.                                                                     
                                                                               
  HCS CS  SB 142 (FIN) was reported  out of Committee with "no                 
  recommendation" and with a fiscal note by the Senate Finance                 
  Committee dated 4/08/93.                                                     
                                                                               
  SENATE BILL 154                                                              
                                                                               
       "An  Act  relating  to the  economic  development grant                 
       program; and providing for an effective date."                          
                                                                               
  Mr.  Gates  stated that  CSSB  154 establishes  the Economic                 
  Development  Grant Program  and places  directly in  statute                 
  specific economic criteria that municipalities and  Regional                 
  Development Organizations (ARDOR's) must meet in order to be                 
  eligible.  The Office of Management  and Budget will form an                 
  evaluation committee  with  the Department  of Commerce  and                 
  Economic Development (DCED) and  the Department of Community                 
  and Regional Affairs (DCRA) and other agencies to prioritize                 
  the projects.  The amended version of the bill replaces DCED                 
  as   the  administering   agency  with  the   Department  of                 
  Administration (DOA).                                                        
                                                                               
  The  program  creates  an  competitive  approach   in  which                 
  projects  are  prioritized.    Discussion  followed  between                 
                                                                               
                               14                                              
                                                                               
                                                                               
  Representative  Navarre and  Mr. Gates  regarding  the grant                 
  fund appropriation and the prioritized list.  Representative                 
  Navarre felt the proposed program was a duplication of other                 
  legislation.   Mr. Gates  replied  there are  gaps in  other                 
  proposed project  legislation.  Co-Chair Larson  agreed with                 
  Representative Navarre.  Mr. Gates stated the legislation is                 
  not a matching grant, and there should be no match required.                 
                                                                               
                                                                               
  Representative  Brown   did  not   understand  the   project                 
  feasibility.    She  recommended  adding  a  requirement  to                 
  indicate the economic  feasibility of the legislation.   The                 
  criteria submitted  would be  used  to rank  rather than  to                 
  match.  Mr. Gates disagreed with Representative Brown.                       
                                                                               
  SENATOR GEORGE JACKO stated  that an intent letter  had been                 
  exchanged  between the  House and  Senate Finance  Co-Chairs                 
  indicating criteria  used for  the legislation.   Mr.  Gates                 
  explained the fund at DCED is a matching grant fund for non-                 
  profit organizations which  requires a match.   The proposed                 
  legislation  does  not  require  a  catch match.    Economic                 
  development projects can be  funded without the  requirement                 
  for a match although one of the criteria is to determine how                 
  much money  is being  brought in  from other  sources.   The                 
  primary difference between the two is the match requirement.                 
                                                                               
                                                                               
  Representative  Parnell  asked if  a  match  requirement was                 
  imposed on the  legislation, would the purpose  be defeated.                 
  Senator  Jacko  replied,   the  established  criteria  would                 
  require that  a match be provided by  local participation in                 
  the project.  Co-Chair  MacLean pointed out that within  the                 
  Senate capital budget, $15 million dollars worth of economic                 
  matching grant monies  are available.   Mr. Gates added each                 
  project on the list have match components.                                   
                                                                               
  Representative  Brown suggested that  taxes and  other costs                 
  imposed to the  State should be  indicated.  She asked  that                 
  specified  criteria  be  required.      Representative Brown                 
  recommended   to   continue  funding   economic  development                 
  projects  already  in   place  rather  than   beginning  new                 
  programs.  Senator Jacko said his intention was to establish                 
  a  better  system  with   the  Administration's  assistance.                 
  Representative   Brown   asked   why   the   Department   of                 
  Administration  was chosen  to be  the  lead agency  for the                 
  proposed legislation.                                                        
                                                                               
  (Tape Change, HFC 93-130, Side 2).                                           
                                                                               
  Mr. Gates replied  that DOA  currently administer's all  the                 
  paper work and could insure a consistent process.                            
                                                                               
                                                                               
                               15                                              
                                                                               
                                                                               
  Representative Martin noted concern  with the criteria  used                 
  to determine  the projects  and felt  that the  unemployment                 
  status of an area  should be emphasized.  Mr.  Gates replied                 
  ranking the projects was not prioritized.                                    
                                                                               
  PAUL FUHS, COMMISSIONER, DEPARTMENT OF COMMERCE AND ECONOMIC                 
  DEVELOPMENT,  stated  there are  "ready" grants  and "small"                 
  grants   in  economic   development  which   are   used  for                 
  feasibility studies.  The proposed  legislation is meant for                 
  the large scale projects which are not indicated in the rest                 
  of the budget.                                                               
                                                                               
  Representative Brown asked how the  projects differ from the                 
  existing process complied  in the Governor's capital  budget                 
  for statewide  economic development projects.   Commissioner                 
  Fuhs stated the  difference is that  SB 154 establishes  six                 
  criteria which are to be used by the Legislature to evaluate                 
  the projects.                                                                
                                                                               
  CS SB 154 (L&C)(efd  fld) was HELD in Committee  for further                 
  consideration.                                                               
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 3:10 P.M.                                           
                                                                               
                                                                               
                               16                                              

Document Name Date/Time Subjects