Legislature(1995 - 1996)
03/20/1995 01:40 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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.