Legislature(1995 - 1996)

03/20/1995 01:40 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 20, 1995                                        
                            1:40 P.M.                                          
                                                                               
  TAPE HFC 95 - 57, Side 1, #000 - end.                                        
  TAPE HFC 95 - 57, Side 2, #000 - end.                                        
  TAPE HFC 95 - 58, Side 1, #000 - #486.                                       
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair  Mark  Hanley called  the  House Finance  Committee                 
  meeting to order at 1:40 P.M.                                                
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Hanley               Representative Kohring                         
  Co-Chair Foster               Representative Martin                          
  Representative Mulder         Representative Navarre                         
  Representative Brown          Representative Parnell                         
  Representative Grussendorf    Representative Therriault                      
  Representative Kelly                                                         
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Senator   John   Torgerson;    Melinda   Gruening,    Staff,                 
  Representative  Joe  Green;  Representative  Joe Green;  Pam                 
  Neil,   President,  Alaska   State   Chamber  of   Commerce,                 
  Anchorage; Michael  McGee, Chief, PFD  Operations, Permanent                 
  Fund  Dividend  Division,   Department  of  Revenue;   Kevin                 
  Koechlein, Director of Public Safety  for the Matsu Borough,                 
  Matsu;  Bob  Griffith,  Sgt., Anchorage  Police  Department,                 
  Anchorage; Steven O'Connor, Chair, KPB 9-1-1 Advisory Board,                 
  Kenai Peninsula Borough, Soldotna; Craig  Lewis, Director of                 
  Emergency Medical  Services, Fairbanks; Kyle  Parker, Staff,                 
  Representative Gail Phillips.                                                
                                                                               
  SUMMARY                                                                      
                                                                               
  HB 32     An  Act  relating  to  administrative  proceedings                 
            involving  a determination  of  eligibility for  a                 
            permanent fund  dividend or  authority to claim  a                 
            dividend on behalf of another.                                     
                                                                               
            CS HB 32  (FIN) was reported out of Committee with                 
            a "no recommendation"  and with  a fiscal note  by                 
            the Department of Revenue dated 2/13/95.                           
                                                                               
  HJR 1     Proposing an  amendment to the Constitution of the                 
            State of Alaska relating to repeal  of regulations                 
            by the legislature.                                                
                                                                               
                                1                                              
                                                                               
                                                                               
            HJR 1  was reported  out of  Committee with  a "do                 
            pass"  recommendation and  a  fiscal  note by  the                 
            Office of the  Governor dated  3/01/95 and a  zero                 
            fiscal  note  by  the   Department  of  Law  dated                 
            3/01/95.                                                           
                                                                               
  SB 55     An Act repealing  the sunset  of the enhanced  911                 
            emergency reporting systems.                                       
                                                                               
            SB 55  was reported  out of  Committee with  a "do                 
            pass" recommendation and with zero fiscal notes by                 
            the   Department   of   Commerce    and   Economic                 
            Development  dated  2/03/95,  the   Department  of                 
            Public Safety dated 2/03/95, and the Department of                 
            Health and Social Services dated 2/03/95.                          
  SENATE BILL 55                                                               
                                                                               
       "An  Act  repealing  the  sunset  of the  enhanced  911                 
       emergency reporting systems."                                           
                                                                               
  SENATOR JOHN TORGERSON  testified in support  of SB 55.   He                 
  explained the legislation would repeal the delayed Amendment                 
  provisions of the enhanced 911 emergency reporting  systems,                 
  as enacted in 1993.                                                          
                                                                               
  Senator  Torgerson  indicated  that  there  is a  review  of                 
  federal and/or state  funding for enhanced 911  systems.  He                 
  ascertained that  a funding  source for  a statewide  system                 
  would be remote.   At the same time, there  are enhanced 911                 
  systems in the State which are operating, and the State must                 
  be assured of  the ability to  assess a surcharge to  ensure                 
  operations.  He added that those systems have proven to be a                 
  viable and critical service.  The  bill, SB 55, would remove                 
  the "sunset" provisions resulting from the 1993 legislation.                 
  He  continued,   the  effect   of  the   bill  would   allow                 
  municipalities to  continue to  impose a  surcharge for  911                 
  services after July 1, 1996, and which in turn would provide                 
  for the critical service of the enhanced 911.                                
                                                                               
  Senator  Torgerson  spoke  in  opposition  to  Amendment  #1                 
  provided  by   Representative  Brown.     [Copy  on   file].                 
  Representative Brown  provided  the Committee  with a  brief                 
  history of  the system.   She stated  that Alaska  currently                 
  does not have  a universal  911 system although  communities                 
  are moving forward in developing a more sophisticated system                 
  of E911.  At this time, ten percent of Alaska does  not have                 
  any type of  emergency response system.   A number of  other                 
  communities  have  a  basic  system,  but not  the  enhanced                 
  service.                                                                     
                                                                               
                                                                               
                                2                                              
                                                                               
                                                                               
  Representative  Brown  suggested the  benefits  in providing                 
  middle ground communities  the opportunity  to use the  same                 
  mechanism  that  the larger  communities  have in  place for                 
  taking advantage of the E911.  That system would provide for                 
  an adequate public safety response  system within the State.                 
  She suggested ways of funding  the statewide response system                 
  which would not  effect the revenue  source to the  existing                 
  municipalities.  Amendment #1 would expand the definition of                 
  who could use the funds for a basic system.                                  
                                                                               
  Representative Brown summarized that there  would be no cost                 
  to  the State associated  with the  proposed amendment.   At                 
  this time, in order to have use of the E911 system, a charge                 
  to the users is attached at  a rate of $.50 cents per  month                 
  for the larger communities and $.75  cents per month for the                 
  smaller communities.  Those fees are  collected by the phone                 
  companies and then passed  on to the local government.   The                 
  local  governments  in  turn  use  those  fees  to  purchase                 
  equipment.                                                                   
                                                                               
  Representative  Brown  pointed out  that  the sunset  on the                 
  original  legislation would  have removed  the  authority to                 
  make the  change next  year.   The effect  of the  amendment                 
  would  allow those  communities  to use  that  fund for  any                 
  aspect   of   their   basic    enhanced   response   system.                 
  Representative  Brown  pointed out  that  there has  been no                 
  municipal  opposition to  the concept proposed  by Amendment                 
                                                                               
  KEVIN KOECHLEIN,  DIRECTOR OF  PUBLIC SAFETY  FOR THE  MATSU                 
  BOROUGH, MATSU, spoke in  support of SB 55.   He pointed out                 
  that the most important service  that government can provide                 
  its citizens is emergency medical  services and basic public                 
  safety  reporting  systems.     SB  55  would   allow  local                 
  municipalities around Alaska to continue to provide enhanced                 
  911   capabilities   not   only  in   the   development  and                 
  installation of the systems but  also the yearly operational                 
  costs to the systems.   He urged the Committee  to implement                 
  the proposed legislation promptly.                                           
                                                                               
  Representative Martin asked when the  public would no longer                 
  be responsible for paying the service charge.  Mr. Koechlein                 
  agreed  that  the  municipalities should  either  reduce the                 
  surcharge or reduce the tax dollars.   He guaranteed that at                 
  some point there would be a reduction to the public.                         
                                                                               
  Representative    Brown    disagreed   stating    that   the                 
  municipalities would continue to use  the surcharge in order                 
  to maintain the dispatch services.  She added that currently                 
  Anchorage is spending over  $5 million dollars per year  for                 
  costs associated with the response.                                          
                                                                               
                                                                               
                                3                                              
                                                                               
                                                                               
  Representative Parnell  elaborated that  when the  surcharge                 
  was  initially  enacted,  he  understood  that it  would  be                 
  discontinued when the systems  had been paid for.   He asked                 
  if  the  surcharge  funded  an  entire  communication system                 
  currently in place  or just  the enhanced 911  system.   Mr.                 
  Koechlein replied  that Matsu  Borough  understood that  the                 
  cost  of  the E911  system  would include  the  software and                 
  hardware for  the mapping system  and would  also display  a                 
  primary response  for  the police  or  fire station.    Also                 
  included  in that  sum would  be costs  associated  with the                 
  telephone line charges, costs to  maintain the data base and                 
  the individual 911 tracking lines.                                           
                                                                               
  BOB  GRIFFITH, SGT.,  ANCHORAGE  POLICE DEPARTMENT  DISPATCH                 
  CENTER, ANCHORAGE, testified in support of SB 55.  He added,                 
  the  Municipality  of  Anchorage   generates  $883  thousand                 
  dollars  revenue  from the surcharge.   Current expenditures                 
  to  support the 911 related service is $5.1 million dollars.                 
  Representative Parnell asked what costs had been included in                 
  the expenditure total.  Mr. Griffith pointed out that 50% of                 
  the dispatch  operation costs  amounted to  over $5  million                 
  dollars  and  did  not  include  the  operator  expenses  to                 
  coordinate  the  response.    Discussion  followed   between                 
  Representative  Parnell  and   Mr.  Griffith  regarding  the                 
  expenditures.                                                                
                                                                               
  Representative Martin voiced his concern  that the people of                 
  Anchorage were paying for more than  the E911 services.  Mr.                 
  Griffith  reiterated  that the  costs  to  man the  24  hour                 
  operation, which receives more than  12,000 calls per month,                 
  plus the cost of operating the fire department, creates a $5                 
  million dollar budget expenditure.                                           
                                                                               
  Representative  Parnell  agreed  with Representative  Martin                 
  that the surcharge had been passed only to fund  the cost of                 
  the E911 acquisition.  He asked if the acquisition costs had                 
  been met and  pointed out  that the surcharge  had not  been                 
  designed  to pay  for  the personnel  costs.   Mr.  Griffith                 
  responded that the acquisition costs had been amortized over                 
  a ten year period.   In the meantime, the  maintenance costs                 
  associated with the  E911 amounted  to $48 thousand  dollars                 
  per year to maintain the municipal  data base subscribers.                   
                                                                               
  Mr.  Griffith  added  that  the  legislation  would  provide                 
  coverage of the associated  telephone and personnel charges.                 
  Representative  Martin  recommended  extending  the  sunset.                 
  Senator Torgerson  stated that  all municipalities  were not                 
  like Anchorage, pointing out that the Kenai Borough collects                 
  $1000  dollars a month less than the  cost of operation.  He                 
  urged members not to remove the sunset.                                      
                                                                               
  (Tape Change, HFC 95-57, Side 2).                                            
                                                                               
                                4                                              
                                                                               
                                                                               
  STEVEN O'CONNOR, CHAIR, KPB 9-1-1 ADVISORY  BOARD, SOLDOTNA,                 
  stated that the Advisory Council supports the legislation to                 
  repeal the sunset date, July, 1996.  He added, following the                 
  review recommendations from the Alaska Division of Emergency                 
  Services, he encouraged  Committee members not to  adopt any                 
  amendments.                                                                  
                                                                               
  Mr. O'Connor  continued that  the statewide  E911 system  as                 
  currently proposed  would be  inappropriate.   If the  State                 
  wants to develop an E911 system  then they should do so with                 
  general  funds, a statewide  user fee,  or make  that system                 
  their priority as a capitol project to the Legislature.  The                 
  fee that the Kenai Peninsula Borough currently collects is a                 
  user fee gathered to support the E911 system, not a tax.                     
                                                                               
  Mr. O'Connor suggested creating a working committee upon the                 
  passage of the legislation.  That committee could consist of                 
  technical   specialists   and   E911    users   to   address                 
  recommendations   being  made  by  the  Alaska  Division  of                 
  Emergency Services.  He added that a statewide system should                 
  come  from the  grassroots level and  have input  from local                 
  jurisdictions and agencies.                                                  
                                                                               
  CRAIG LEWIS,  DIRECTOR, INTERIOR  REGION, EMERGENCY  MEDICAL                 
  SERVICES, FAIRBANKS,  encouraged the  Committee to  consider                 
  Amendment #1 offered  by Representative  Brown.  He  advised                 
  that the amendment  would create a  more fair situation  for                 
  rural areas to receive basic 911 services.                                   
                                                                               
  Co-Chair Hanley noted  his concern that the  amendment would                 
  guarantee that  the initial surcharge never be repealed.  He                 
  pointed out  that the addition  of the amendment  would also                 
  require  a  resolution and  title  change which  could delay                 
  passage of the legislation.                                                  
                                                                               
  Representative Brown argued that the initial request for the                 
  surcharge created  conflicting intentions.  She  stated that                 
  it would  be  used to  "acquire,  operate and  maintain  the                 
  system".  She pointed out  that if a fee existed for  larger                 
  communities, other municipalities should be included, adding                 
  that it  would be appropriate  for the local  governments to                 
  use the system.                                                              
                                                                               
  Representative   Brown   MOVED   to  adopt   Amendment   #1.                 
  Representative Mulder OBJECTED.                                              
                                                                               
  A roll call was taken on the MOTION.                                         
                                                                               
       IN FAVOR:      Navarre, Brown, Grussendorf                              
       OPPOSED:       Parnell,  Therriault,   Kelly,  Kohring,                 
                      Martin, Mulder, Hanley                                   
                                                                               
                                5                                              
                                                                               
                                                                               
  Co-Chair Foster was not present for the vote.                                
                                                                               
  The MOTION FAILED (3-7).                                                     
                                                                               
  Co-Chair  Hanley  recommended  the House  Finance  Committee                 
  introduce at a  later date  legislation which would  address                 
  Representative Brown's concern as stated in the amendment.                   
                                                                               
  Representative Mulder MOVED to report SB 55 out of Committee                 
  with individual  recommendations and  with the  accompanying                 
  fiscal notes.  There being NO OBJECTION, it was so ordered.                  
                                                                               
  SB  55  was  reported out  of  Committee  with  a "do  pass"                 
  recommendation and with zero fiscal  notes by the Department                 
  of Commerce  and  Economic Development  dated  2/13/95,  the                 
  Department  of   Public  Safety   dated  2/13/95,   and  the                 
  Department of Health and Social Services dated 2/13/95.                      
  HOUSE JOINT RESOLUTION 1                                                     
                                                                               
       Proposing an amendment to the Constitution of the State                 
       of  Alaska  relating to  repeal  of regulations  by the                 
       legislature.                                                            
                                                                               
  KYLE PARKER, STAFF, REPRESENTATIVE GAIL PHILLIPS,  testified                 
  in support of the  proposed legislation.  He state  that the                 
  proposal would place the constitutional amendment before the                 
  voters of  the State  on the  1996 general  election ballot.                 
  The  amendment  would  permit  the  Legislature   to  repeal                 
  regulations  promulgated  by  State  agencies  that  do  not                 
  properly implement state statutes.                                           
                                                                               
  He  added,  although  many  regulations  do conform  to  and                 
  accurately  implement  the laws  passed by  the Legislature,                 
  there  are   an  increasing   number  of  situations   where                 
  regulations imposed on the citizens of the State do not.  In                 
  many  cases,   legislative   directives   are   ignored   or                 
  regulations are promulgated that go far beyond  the scope of                 
  what the Legislature intended.                                               
                                                                               
  Mr. Parker noted that this issue  has been before the voters                 
  three times before, and prior efforts to persuade the voters                 
  to  support similar amendments  have failed.   Nevertheless,                 
  with a better presentation, clearer  ballot language and the                 
  current   popular   support  for   regulatory   reform,  the                 
  constitutional amendment can become a reality.                               
                                                                               
  Representative  Grussendorf  MOVED to  report  HJR 1  out of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal notes.  Representative Kohring asked the                 
  impact of the proposed legislation.  Mr. Parker remarked the                 
                                                                               
                                6                                              
                                                                               
                                                                               
  last time the  legislation was before  the voters was  1986.                 
  He added with the new emphasis on the regulatory reform, the                 
  voters will be more amenable to the legislation.                             
                                                                               
  PAM  NEIL,  PRESIDENT,  ALASKA STATE  CHAMBER  OF  COMMERCE,                 
  ANCHORAGE, testified in support of HJR 1.                                    
                                                                               
  There being NO OBJECTIONS, it was so ordered.                                
                                                                               
  HJR  1  was  reported out  of  Committee  with  a "do  pass"                 
  recommendation and with a  fiscal note by the Office  of the                 
  Governor  dated  3/01/95  and  a  zero  fiscal note  by  the                 
  Department of Law dated 3/01/95.                                             
  HOUSE BILL 32                                                                
                                                                               
       "An   Act   relating   to  administrative   proceedings                 
       involving   a  determination   of  eligibility   for  a                 
       permanent  fund  dividend  or   authority  to  claim  a                 
       dividend on behalf of another."                                         
                                                                               
  MELINDA GRUENING,  STAFF, REPRESENTATIVE  JOE GREEN,  stated                 
  that HB 32 would  address a serious problem with  the number                 
  of appeals  filed after an  applicant is denied  a Permanent                 
  Fund Dividend (PFD), and the length of time that it takes to                 
  process those  appeals.  She  added, that processing  such a                 
  large number of appeals is costly as well as being unfair to                 
  those who have a legitimate claim.   Currently there are ten                 
  permanent  full  time  employees   in  the  Permanent   Fund                 
  Division, yet there are still almost 10,000 appeals pending,                 
  with no  end  in  sight.    In  years  prior  to  1994,  the                 
  percentage rate of denials was significantly higher.                         
                                                                               
  HB  32  would implement  a  $25 filing  fee  for individuals                 
  protesting  the  denial  of  their  PFD  application.    The                 
  legislation would provide  for a  waiver of the  fee for  an                 
  indigent individual who is a member of a family whose income                 
  is equal to or less than the federal poverty guideline.  The                 
  filing fee would be refundable if the  appeal is successful,                 
  and non-refundable if the denial was upheld.                                 
                                                                               
  Representative  Martin  voiced   his  concern  with  appeals                 
  submitted by military personnel and their families.                          
                                                                               
  REPRESENTATIVE  JOE  GREEN  acknowledged that  the  military                 
  concern had been addressed in other pending legislation.  He                 
  added  that  the  established  criteria  used  to  determine                 
  eligibility  sometimes appears to be subjective.  Discussion                 
  followed  between  Representative  Green and  Representative                 
  Martin regarding a person's intent  when trying to determine                 
  eligibility.                                                                 
                                                                               
                                                                               
                                7                                              
                                                                               
                                                                               
  Representative Brown asked Representative Green if filing an                 
  appeal time limit had been  considered.  Ms. Gruening stated                 
  that  it would be  more reasonable  to institute  a deadline                 
  filing date.   She added, approximately  54% of the  denials                 
  are labeled by the Department as "bright-line" issues.                       
                                                                               
  Tape Change, HFC 95-58, Side 1).                                             
                                                                               
  Representative   Therriault   recommended  a   "family  fee"                 
  consideration  for  military   and/or  education   concerns.                 
  Representative Green  explained that consideration  had been                 
  made.                                                                        
                                                                               
  MICHAEL  MCGEE,   CHIEF,  PFD  OPERATIONS,   PERMANENT  FUND                 
  DIVIDEND DIVISION,  DEPARTMENT OF  REVENUE, noted that  each                 
  case is treated separately.  Representative Martin asked who                 
  would file for  a child in a foster home.  Mr. McGee advised                 
  that the  State Department  of Health  and Social  Services,                 
  Family and Youth Service Division,  would be the responsible                 
  party  to file for the  child.  Each  year, DHSS files about                 
  2200 PFD cases.                                                              
                                                                               
  Mr.  McGee  stated  that  the  legislation would  discourage                 
  frivolous   persons  from   filing   an  appeal,   although,                 
  legislative clean-up  projects have  exasperated the  denial                 
  system.  He  added that all applications  containing missing                 
  information were denied.   There are certain  policies being                 
  implemented  in  DHSS  that  are  eliminating  some  of  the                 
  problems with the PFD system.  Mr. McGee concluded that with                 
  the addition of a due date on appeals would create an unfair                 
  situation for rural communities.                                             
                                                                               
  Discussion  followed among  Committee members  regarding the                 
  effective  date  of the  bill.   Representative  Grussendorf                 
  understood that it  would be  90 days after  passage of  the                 
  legislation.  Representative Martin thought it would be July                 
  1, 1995,  the beginning of the  new fiscal year.   Mr. McGee                 
  advised  that  administering  the  implementation  would  be                 
  difficult  and  that it  would  create  the need  for  a new                 
  section  to  account  for   funds.    Representative  Mulder                 
  recommended implementing the legislation on January 1, 1996.                 
                                                                               
                                                                               
  Representative  Brown commented  that  the correct  language                 
  would be technically  challenging in  order to provide  this                 
  calendar year's regulation inclusion.   Representative Green                 
  stated that he would be amenable to the change.                              
                                                                               
  Ms.  Gruening  responded that  appeals  had  been overturned                 
  resulting from lack  of information  and are not  considered                 
  "frivolous".   These are  not the  appeals addressed  in the                 
  proposed legislation.  She stated  that regulations could go                 
                                                                               
                                8                                              
                                                                               
                                                                               
  into effect at the beginning of the next cycle.                              
                                                                               
  Representative Parnell  MOVED a conceptual  amendment adding                 
  the language:   "The appeal fee  set forth in AS  43.23.015G                 
  should take effect January 1, 1996".  Mr. McGee advised that                 
  language would provide  the Department  ample time to  write                 
  the  needed  regulations.    Representative  Brown  MOVED  a                 
  "friendly" amendment that regulations be adopted in the 1995                 
  calendar  year.    She  pointed   out  that  the  Department                 
  currently does not have the authority without the additional                 
  language.    There  being  NO  OBJECTION to  the  "friendly"                 
  amendment, it was adopted.  There  being NO OBJECTION to the                 
  amended amendment, it was adopted.                                           
                                                                               
  Representative Parnell MOVED to report CS HB 32 (FIN) out of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal notes. There being NO OBJECTIONS, it was                 
  so ordered.                                                                  
                                                                               
  CS  HB 32  (FIN) was  reported out of  Committee with  a "no                 
  recommendation" and with a fiscal note by  the Department of                 
  Revenue dated 2/13/95.                                                       
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 3:35 P.M.                                           

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