Legislature(1997 - 1998)

03/05/1997 01:40 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                                                                               
                     HOUSE FINANCE COMMITTEE                                   
                          MARCH 5, 1997                                        
                            1:40 P.M.                                          
                                                                               
  TAPE HFC 97 - 46, Side 1, #000 - end.                                        
  TAPE HFC 97 - 46, Side 2, #000 - end.                                        
  TAPE HFC 97 - 47, Side 1, #000 - end.                                        
  TAPE HFC 97 - 47, Side 2, #000 - #682.                                       
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair  Gene Therriault called the House Finance Committee                 
  meeting to order at 1:40 P.M.                                                
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Hanley               Representative Kelly                           
  Co-Chair Therriault           Representative Kohring                         
  Representative Davies         Representative Martin                          
  Representative Davis          Representative Mulder                          
  Representative Foster                                                        
                                                                               
  Representative Grussendorf and Representative Moses were not                 
  present for the meeting.                                                     
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Representative   Alan   Austerman;  Amy   Daugherty,  Staff,                 
  Representative  Austerman;  Timothy  Sullivan   Jr.,  Staff,                 
  Representative  Eldon  Mulder;  Nico  Bus, Chief,  Financial                 
  Services, Department of Natural Resources; Barbara  Ritchie,                 
  Deputy Attorney General, Civil  Division, Department of Law;                 
  Jerry  Dugan,  (Testified  via   teleconference),  Executive                 
  Director,   Alaska   Marine  Safety   Education  Association                 
  (AMSEA),    Petersburg;    Ian    Fulp,    (Testified    via                 
  teleconference),  Director,  Parks and  Recreation,  City of                 
  Kodiak, Kodiak; Pat Holmes, (Testified via  teleconference),                 
  Fisherman, Kodiak; Al Burch, (Testified via teleconference),                 
  Kodiak;   Bill   Barker,  (Testified   via  teleconference),                 
  Fisherman,   Kodiak;   Barbara    Burch,   (Testified    via                 
  teleconference), Kodiak Fishermen Wives Association, Kodiak;                 
  Sue Hargis, United States Coast Guard, Juneau; Betty Martin,                 
  State Comptroller,  State Treasury,  Department of  Revenue;                 
  Mark Johnson,  Emergency Medical Services  (EMS), Department                 
  of Health and Social Services; Kevin Smith, Alaska Municipal                 
  League (AML),  Joint  Insurance  Association,  Juneau;  Fred                 
  Fisher,  Director,  Division  of   Administrative  Services,                 
  Department of Law.                                                           
                                                                               
  SUMMARY                                                                      
                                                                               
                                                                               
                                1                                              
                                                                               
                                                                               
  HB 13     An  Act  relating  to marine  safety  training and                 
            education programs.                                                
                                                                               
            CS HB 13 (FIN) was reported out of Committee  with                 
            a  "no recommendation"  and with  two zero  fiscal                 
            notes by the Department of Labor dated 2/21/97 and                 
            the House Finance Committee.                                       
                                                                               
  HB 30     An   Act   relating   to   civil   liability   for                 
            skateboarding;  and  providing  for  an  effective                 
            date.                                                              
                                                                               
            CS HB 30 (FIN) was reported out of Committee  with                 
            a "do pass"  recommendation and  with zero  fiscal                 
            notes  by the  Legislature dated  1/31/97  and the                 
            Alaska Court System dated 1/31/97.                                 
                                                                               
  HB 113    An  Act extending  lapse  dates for  certain prior                 
            year appropriations; making supplemental, capital,                 
            and special  appropriations; and providing  for an                 
            effective date.                                                    
                                                                               
            HB   113  was  HELD   in  Committee   for  further                 
            consideration.                                                     
  HOUSE BILL 13                                                                
                                                                               
       "An  Act  relating   to  marine  safety  training   and                 
       education programs."                                                    
                                                                               
  REPRESENTATIVE ALAN AUSTERMAN stated  that the Alaska Marine                 
  Safety Education  Association (AMSEA) has  been operating in                 
  the State  of Alaska for 12  years.  The primary  purpose of                 
  the organization is to reduce the loss of life and injury in                 
  the  Alaskan  marine  environment  by  providing   education                 
  through  a statewide  network  of  qualified  marine  safety                 
  instructors.                                                                 
                                                                               
  AMSEA  provides   the  safety  training   required  by   the                 
  Commercial Fishing Vessel Safety Act  of 1988 to communities                 
  throughout Alaska.   The  Act, which  took  effect in  1991,                 
  requires  a  minimum in  safety  training and  equipment for                 
  commercial fishing vessels.                                                  
                                                                               
  Representative  Austerman continued  that  AMSEA also  helps                 
  Alaskans by providing marine safety instructor training, and                 
  that some of these teachers  teach drill instructor courses.                 
  Other  marine  safety  instructors  also  train  the  Alaska                 
  boating  and  fishing public,  including  many  children and                 
  adults, in marine safety.  Of the 7,300 people AMSEA trained                 
  in 1995, 2000 were from  the commercial fishing industry and                 
  3,700 were children.                                                         
                                                                               
                                2                                              
                                                                               
                                                                               
  According to a study conducted in  1995 by the Native Health                 
  Service, the AMSEA training significantly reduced fatalities                 
  among  commercial fishermen,  thus,  coinciding with  a  50%                 
  percent drop in fishing  fatalities in Alaska over the  past                 
  four  years. Representative  Austerman suggested  that AMSEA                 
  deserves  the  State's intervention  to  ensure  a long-term                 
  stable funding source.                                                       
                                                                               
  He pointed out  that the Fishermen's Fund (AS 23.35.060) was                 
  created  before  statehood.    One  hundred percent  of  the                 
  fishermen's fund  is provided by commercial  fishing license                 
  fees.  Sixty percent  of license fees are dedicated  to that                 
  fund.      Since   commercial   fishermen  are   often   the                 
  beneficiaries  of the  required marine  safety  training, it                 
  would be appropriate to  allow part of the interest  of that                 
  fund to be  used to  support some of  AMSEA's marine  safety                 
  programs.                                                                    
                                                                               
  Representative Austerman  pointed out  that  the note  which                 
  passed out of the  House Finance Committee last year  was in                 
  the amount of  $150 thousand  dollars.  The  group would  be                 
  comfortable with that amount, although,  he pointed out that                 
  current interest earnings for the fund  are in the amount of                 
  $450 thousand dollars.                                                       
                                                                               
  Representative Mulder asked if the  program had considered a                 
  fee-based structure for  funding.  Representative  Austerman                 
  requested  that  Mr. Dugan,  the  Executive Director  of the                 
  program respond.                                                             
                                                                               
  Representative Martin  asked the amount  currently available                 
  in  the   fund.    Representative  Austerman   replied  that                 
  approximately  $7.367   million  dollars   remains  in   the                 
  Fishermen's  Fund.    The Department  of  Treasury  would be                 
  responsible  for   any  investment.     Co-Chair  Therriault                 
  corrected that  the current  balance in  the account was  $9                 
  million dollars.  Representative G. Davis questioned why the                 
  fiscal note indicated only a 5.3% interest rate.                             
                                                                               
  JERRY  DUGAN,  (TESTIFIED  VIA   TELECONFERENCE),  EXECUTIVE                 
  DIRECTOR,   ALASKA   MARINE  SAFETY   EDUCATION  ASSOCIATION                 
  (AMSEA),  PETERSBURG,  responded  to  Representative  Mulder                 
  explaining  that AMSEA currently  uses a fee-based structure                 
  for most of the  provided training.  A sliding scale  fee is                 
  used, which varies  depending upon  the need.   Most of  the                 
  fees are used  to pay the  instructor and not to  supplement                 
  the program.                                                                 
                                                                               
  At the end  of last year, the  program was faced with  a $50                 
  thousand dollar budget, reducing the  staff to one person to                 
  run the entire State program.  In October, 1996, the program                 
                                                                               
                                3                                              
                                                                               
                                                                               
  received a federal grant  increasing that budget,  although,                 
  those funds end September  30, 1997.  There is  no guarantee                 
  of funding after that point.                                                 
                                                                               
  Representative J.  Davies inquired about the  needed amount.                 
  Mr.  Dugan  responded  that  the  program  would  need  $150                 
  thousand  dollars  to  stay  "afloat".   That  amount  would                 
  provide the core  program and staff  a 2.5 person office  to                 
  coordinate, administer and  instruct programs throughout the                 
  State.                                                                       
                                                                               
  In response to  Representative Davies, Mr. Dugan  noted that                 
  his  office   had  provided   a  budget   detail  sheet   to                 
  Representative Austerman's office  last year.  A  handout of                 
  the budget detail  sheet was provided to  Committee members.                 
  [Attachment on file].                                                        
                                                                               
  Representative  Mulder  inquired   the  "range"  of  charges                 
  required  of the communities.   Mr. Dugan explained that the                 
  least  amount would be free and only for a very needy group.                 
  The highest amount charged was $65/hour.                                     
                                                                               
  Representative  Mulder  questioned  the  criteria  used   to                 
  determine if a  group had  "great need".   Mr. Dugan  stated                 
  that "great need"  could be used  to reference a  commercial                 
  fishermen  group  under  a federal  deadline  mandating  the                 
  training  before  the fishing  season  had begun  and before                 
  income  had begun  to come  in.   He suggested  that a  good                 
  example would be the Village  of Angoon on Admiralty Island,                 
  an area with a high level of unemployment.                                   
                                                                               
  Representative Mulder asked who was required to complete the                 
  AMSEA  training.    Mr. Dugan  explained  that  fishermen on                 
  documented fishing vessels  which fish in outside  waters or                 
  beyond the western coast would  be required.  Representative                 
  Mulder questioned how the "children"  aspect worked into the                 
  training.  Mr.  Dugan explained that  marine safety is  also                 
  taught to high  school children who  fish or crew on  boats.                 
  For younger  children, there  is an  abbreviated program  to                 
  familiarize them with boating devices and safety procedures.                 
  Mr.  Dugan  continued,  if  someone  were certified  in  the                 
  training, they would  then be  able to train  others.   That                 
  instruction would be beyond the regular level of instruction                 
  and is the core of the program.                                              
                                                                               
  Representative Mulder observed that once a funding mechanism                 
  is in place,  it becomes  close to impossible  to remove  it                 
  from the books.  Mr. Dugan pointed out with more instructors                 
  trained, the group  then will  be responsible to  administer                 
  the programs.                                                                
                                                                               
  PAT  HOLMES,  (TESTIFIED  VIA   TELECONFERENCE),  FISHERMAN,                 
                                                                               
                                4                                              
                                                                               
                                                                               
  KODIAK, testified in support of the legislation.  He pointed                 
  out that Alaska has ten times the national rate of drowning.                 
  Alaska is the only State which has no marine safety statutes                 
  or programs.   AMSEA  provides  in Alaska,  what many  other                 
  states government's are mandated to  provide.  He emphasized                 
  how important the  program is to the State.   He pointed out                 
  that previous funding  had been  provided through grants,  a                 
  program which now is "drying" up.   He urged the Committee's                 
  support of the legislation.                                                  
                                                                               
  AL  BURCH, (TESTIFIED  VIA  TELECONFERENCE), KODIAK,  voiced                 
  support of the legislation.  He  provided a brief history of                 
  fishing in Alaska.   He  spoke to the  resistance that  most                 
  fishermen have had  toward a  federal initiative to  mandate                 
  training and how that attitude  has changed through the many                 
  lives which  have been  saved because  of the  program.   He                 
  urged that a portion of the interest on the Fishermen's Fund                 
  be used to further save lives.                                               
                                                                               
  BILL  BARKER,  (TESTIFIED  VIA  TELECONFERENCE),  FISHERMAN,                 
  KODIAK, spoke in favor HB 13.  He stressed that AMSEA's work                 
  saves lives and how important the  training would be for the                 
  fishing communities.  The program  is an educational concern                 
  and would  be appropriately  funded through  the Fishermen's                 
  Fund.  Mr. Barker reiterated that  the training saves lives.                 
                                                                               
                                                                               
  BARBARA  BURCH,  (TESTIFIED   VIA  TELECONFERENCE),   KODIAK                 
  FISHERMEN WIVES ASSOCIATION, KODIAK, testified in support of                 
  the legislation stressing the importance of the program.                     
                                                                               
  SUE HARGIS, UNITED STATES COAST  GUARD (USCG), JUNEAU, noted                 
  support of the legislation.  She noted the importance of the                 
  program  as  there   are  no  other  State   programs  which                 
  coordinate  any type of boating efforts.   She urged members                 
  to support the legislation.                                                  
                                                                               
  MARK JOHNSON,  EMERGENCY MEDICAL SERVICES  (EMS), DEPARTMENT                 
  OF HEALTH AND SOCIAL SERVICES,  voiced strong support of  HB
  13.  Drowning  in Alaska is  a major public health  problem;                 
  often there are more  drownings in the State than  there are                 
  deaths on public  highways.  He  advised that the Office  of                 
  Emergency Medical Services provided the first drowning study                 
  in 1979,  and recognized drowning  as a major  public health                 
  problem since then.  EMS is one of the agencies which helped                 
  form AMSEA and  has continued  to help fund  them through  a                 
  variety of federal grants since that time.  All those grants                 
  have  been  temporary.    Mr.   Johnson  stressed  that  the                 
  organization deserves stable funding.                                        
                                                                               
  Co-Chair Hanley asked  if the Governor had  included funding                 
  for that item in this year's budget.                                         
                                                                               
                                5                                              
                                                                               
                                                                               
  AMY DAUGHERTY, STAFF, REPRESENTATIVE ALAN AUSTERMAN,  stated                 
  that no funding  had been  included in the  FY98 budget  for                 
  AMSEA.                                                                       
                                                                               
  Co-Chair Therriault asked  if it had been  acknowledged that                 
  only  AMSEA  be the  recipient of  the grant  for education.                 
  Representative   Austerman   responded   that    the   AMSEA                 
  organization, to date, has provided the training as a result                 
  of federal laws.   He agreed that as the program matures, it                 
  could be  placed into  the private  sector.   Representative                 
  Martin exclaimed that a 5.2% interest rate was a low rate.                   
                                                                               
  BETTY MARTIN, STATE COMPTROLLER, STATE TREASURY,  DEPARTMENT                 
  OF  REVENUE,  replied  that the  current  general investment                 
  funds include over one hundred smaller funds, some of which,                 
  through  statutory or  Attorney  General  opinions have  the                 
  right to receive  their own interest.  The  Fishermen's Fund                 
  is not one of those funds.  The Department of Administration                 
  determines which of  those funds are eligible  for interest.                 
  The  current agreement is  to pay  each organization  at the                 
  rate of  5.2% interest income.   The  State at this  time is                 
  reconsidering the practice with the intent to pay the entire                 
  interest received to each of the individual funds.                           
                                                                               
  (Tape Change HFC 97-46, Side 2).                                             
                                                                               
  Representative Martin asked  if there was a  major disaster,                 
  could the principle of the fund be used quickly.  Ms. Martin                 
  explained that there was a limit of $2,500 dollar per person                 
  cap to  the amount  paid out  of the  fund.   Representative                 
  Martin questioned the cap.                                                   
                                                                               
  Representative  Martin suggested that the amount provided to                 
  AMSEA should  be a guaranteed  amount rather  than a  moving                 
  amount  as  predetermined by  the  interest rate.   Co-Chair                 
  Therriault pointed out that the  language was permissive and                 
  that  the  Legislature  could appropriate  "none"  or  "all"                 
  through  the  budgeting   process.    Representative  Martin                 
  reiterated that a specific number should be guaranteed.  Co-                 
  Chair  Hanley  added  that  the  appropriation  would  be  a                 
  budgetary issue and  that any amount could  be appropriated.                 
  He  pointed  out  that  if  the  bill passes,  it  would  be                 
  accompanied  by  a  fiscal  note,  however, next  year,  the                 
  request would only  be a line  item in  the budget, open  to                 
  debate.                                                                      
                                                                               
  Representative  J.  Davies  asked where  the  money  for the                 
  fiscal note  would be  indicated  in the  budget.   Co-Chair                 
  Therriault  distributed the  House Finance  Committee  a new                 
  zero  fiscal  note,  suggesting  that  through   the  budget                 
  process, the amount would be determined.   In the  past, the                 
                                                                               
                                6                                              
                                                                               
                                                                               
  Department   of   Administration  placed   the   request  in                 
  designated  grants component in  Department of Community and                 
  Regional Affairs budget.  Representative  J. Davies asked if                 
  the money was  appropriated, would  it appear as  designated                 
  program  receipts.    Co-Chair Therriault  stated  that  the                 
  Department would be responsible to show a reduction in order                 
  to authorize requested funding for the program.                              
                                                                               
  Representative  G. Davis MOVED to delete language on Page 1,                 
  Lines  9  & 10,  "to  the  Alaska  Marine  Safety  Education                 
  Association".  There being NO OBJECTION, it was adopted.                     
                                                                               
  Representative  Martin  MOVED  to  change  Page 1,  Line  8,                 
  deleting "50  percent" and  inserting "up  to $250  thousand                 
  dollars".    Co-Chair Hanley  believed  that could  create a                 
  problem  when  $250  thousand  dollars  was  not  earned  in                 
  interest  income.   He  reiterated that  the issue  could be                 
  addressed in the budget process.                                             
                                                                               
  Co-Chair    Therriault    OBJECTED    to    Amendment    #2.                 
  Representative J. Davies  voiced support to keep  the number                 
  "floating",  reminding  members  that there  will  always be                 
  pressure to keep it as small as possible.                                    
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
       IN FAVOR:      G. Davis, Martin, Mulder                                 
       OPPOSED:       Foster, Kohring, J.  Davies, Therriault,                 
                      Hanley                                                   
                                                                               
  Representatives  Grussendorf,  Kelly,  and  Moses  were  not                 
  present for the vote.                                                        
                                                                               
  The MOTION FAILED (3-5).                                                     
                                                                               
  Representative  G.  Davis  noted  for  the  record  that  he                 
  supported the  work of  AMSEA and  that the  reason for  his                 
  amendment  was not  intended as  a personal  threat to  that                 
  group.                                                                       
                                                                               
  Representative Foster MOVED to report CS  HB 13 (FIN) out of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal notes.   Co-Chair Hanley disclosed  that                 
  he  had  a  conflict  of  interest  as  he  does  acquire  a                 
  commercial fishing license and has  utilized the AMSEA fund.                 
  Representative J. Davies requested more discussion regarding                 
  the fiscal note.  He understood that a fiscal note needed to                 
  be funded  for the first year and would then be dropped into                 
  the budget line items the second year.                                       
                                                                               
  Co-Chair Hanley commented  that had  been the approach  last                 
  year.  Conference  Committee often  reduces fiscal notes  to                 
                                                                               
                                7                                              
                                                                               
                                                                               
  squeeze  them within a certain  dollar amount.  He suggested                 
  that the  fiscal impact of  the legislation be  discussed in                 
  the   Department   of   Community  and   Regional   Affair's                 
  Subcommittee priority.   He added  that the Governor  should                 
  offer an amendment to cover the requested dollar amount.                     
                                                                               
  Co-Chair Therriault said  if a statutory  change is made  to                 
  start a  new program,  the first  year, it  would be  funded                 
  through  a fiscal note,  thereafter, it would  be built into                 
  the base  of the  budget.  Because  HB 13 is  permissive, it                 
  could be either way.                                                         
                                                                               
  Representative  J.  Davies   foresaw  a  problem   with  the                 
  subcommittee  trying to  place  money into  a  budget for  a                 
  program not  yet signed  into effect.   Co-Chair  Therriault                 
  advised  that  to  appropriate  to  the program,  would  not                 
  require that  the program be  in effect.   Representative J.                 
  Davies voiced concern that there clearly was a fiscal impact                 
  which should be noted  in the fiscal note.   Co-Chair Hanley                 
  responded  that  all  fiscal  notes  accompany the  bill  to                 
  Conference Committee.                                                        
                                                                               
  CS HB 13  (FIN) was  reported out  of Committee  with a  "no                 
  recommendation" and with zero fiscal notes by the Department                 
  of Labor dated 2/21/97 and the House Finance Committee.                      
  HOUSE BILL 30                                                                
                                                                               
       "An Act  relating to civil liability for skateboarding;                 
       and providing for an effective date."                                   
                                                                               
  TIMOTHY  SULLIVAN JR.,  STAFF,  REPRESENTATIVE ELDON  MULDER                 
  explained  that  the  Municipality of  Anchorage,  City  and                 
  Borough of  Juneau and  several  other municipalities  would                 
  like to create skateboard parks so skateboarders will have a                 
  place  to ride, rather  than using other  areas designed for                 
  pedestrians.   The  municipalities are  willing  to  develop                 
  areas  suitable  for  skateboard  riding   if  they  can  be                 
  insulated  from liability  for  claims arising  from hazards                 
  inherent in skateboarding.                                                   
                                                                               
  The intent of HB 30 would be to encourage the municipalities                 
  to proceed with development of  areas for outdoor recreation                 
  without increasing their liability unnecessarily.   The bill                 
  would apply only to municipal skateboard parks.                              
                                                                               
  Mr. Sullivan added  that the legislation is  patterned after                 
  legislation  passed  providing  limited  protection  to  ski                 
  areas.  The  protection from  liability relates to  inherent                 
  dangers and  risks of  skateboarding.   The municipality  is                 
  required to post signs warning that there are inherent risks                 
  to skateboarding and the liability would  then rest with the                 
                                                                               
                                8                                              
                                                                               
                                                                               
  skateboarder.                                                                
                                                                               
  Representative   J.  Davies   questioned  benefits   to  the                 
  municipalities.   Mr. Sullivan stated that it  would be cost                 
  prohibitive to  create these areas without  the legislation.                 
  Letters  have  been  included  in  the packet  from  various                 
  municipalities indicating support for the legislation.                       
                                                                               
  Representative Mulder  spoke to  the work draft  on Page  5,                 
  Lines  6  &  7,  indicating  language  added  in  the  House                 
  Judiciary Committee  clarifying that  the legislation  would                 
  not  provide  a  "blanket"  shield  to the  municipality  or                 
  borough who constructs it, although, it would provide for  a                 
  limited amount of protection.                                                
                                                                               
  IAN FULP,  (TESTIFIED VIA  TELECONFERENCE), DIRECTOR,  PARKS                 
  AND RECREATION, CITY OF KODIAK, KODIAK, spoke in  support of                 
  the legislation.   He stated that  the bill would provide  a                 
  place to skateboard and would then provide better management                 
  of  the sport.  He asked if a supervisor were present, would                 
  the municipality be more liable  if there were an  accident.                 
  Representative Mulder suggested that it  would depend on the                 
  function of that supervisor.                                                 
                                                                               
  Committee  members   discussed  "inherent   risk"  and   the                 
  responsibilities   of   the   municipalities  and   boroughs                 
  regarding that concern.                                                      
                                                                               
  Co-Chair  Hanley MOVED  that work  draft  #0-LS0192\K, Ford,                 
  3/5/97, CS HB 30 (FIN), be the version before the Committee.                 
  There being NO OBJECTION, it was adopted.                                    
                                                                               
  Representative  J.  Davies  noted  for  the record  that  he                 
  supports the  legislation, although,  recognized that  there                 
  exists some grey areas.                                                      
                                                                               
  KEVIN SMITH, ALASKA MUNICIPAL LEAGUE (AML),  JOINT INSURANCE                 
  ASSOCIATION,  JUNEAU,   testified  that  AML   supports  the                 
  legislation.  The AML Joint Insurance Association  is a pool                 
  formed by Alaska  Statute, and created for  local government                 
  entities,   specifically   the  municipalities   and  school                 
  districts.   He noted that it has been the experience of his                 
  group  that  municipalities,  in general,  are  reluctant to                 
  become involved with  that type of activity.   Skateboarding                 
  in particular has  been a  common exclusion throughout  most                 
  insurance   league   industry.       The   Joint   Insurance                 
  Association's Trustee Board is willing to drop the exclusion                 
  with passage of HB 30.                                                       
                                                                               
  (Tape Change HFC 97-47, Side 1).                                             
                                                                               
  Representative Kohring MOVED to report CS HB 30 (FIN) out of                 
                                                                               
                                9                                              
                                                                               
                                                                               
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal notes.  There being NO OBJECTION, it was                 
  so ordered.                                                                  
                                                                               
  CS HB  30 (FIN)  was reported  out of  Committee with a  "do                 
  pass" recommendation and  with two zero fiscal  notes by the                 
  Legislature dated 1/31/97 and the  Alaska Court System dated                 
  1/31/97.                                                                     
  HOUSE BILL 113                                                               
                                                                               
       "An Act extending  lapse dates  for certain prior  year                 
       appropriations;  making   supplemental,  capital,   and                 
       special appropriations; and providing for an  effective                 
       date."                                                                  
                                                                               
  DEPARTMENT OF NATURAL RESOURCES                                              
                                                                               
  Section 4(e)                                                                 
                                                                               
       $200.0 thousand dollars  -    Perseverance Trail                        
                                                                               
  NICO  BUS, CHIEF, FINANCIAL  SERVICES, DEPARTMENT OF NATURAL                 
  RESOURCES, stated  that the requested funding  would provide                 
  emergency repairs to the severely storm damaged Perseverance                 
  Trail.   Though  the  trail is  closed, use  continues under                 
  extreme hazardous  conditions.   The work needs  to be  done                 
  before the summer  season, to capture  the high use  period.                 
  Delaying the  work until  the Fall  would expose  workers to                 
  dangerous  avalanche   and  weather  conditions   and  would                 
  increase project costs by limiting the time and access.                      
                                                                               
  Co-Chair Therriault inquired  if any of the  trail rested on                 
  private  property.   Mr.  Bus  noted that  the  entire trail                 
  system was an  "easement into perpetuity", belonging  to the                 
  State of Alaska.                                                             
                                                                               
  Mr.  Bus  advised  that  no  permits  would  be  needed  for                 
  blasting.  Co-Chair Hanley voiced concern with the impact of                 
  the blasting on the streams.  He requested  that a letter of                 
  response  be provided  by the  Department of Fish  and Game,                 
  which would address the impacts  of blasting on the streams,                 
  in order that consistency could be  created in use for other                 
  requests.  Mr. Bus replied that  no permit is needed because                 
  a concrete flume exists  at the bottom of the area  and that                 
  no salmon can run up.                                                        
                                                                               
  Mr. Bus spoke to the breakdown of the request; $120 thousand                 
  dollars would be used for the blasting work and $80 thousand                 
  dollars would be used  for the bridge repair and  tread work                 
  from the beginning of the trail to the last bridge.  Mr. Bus                 
  provided  Committee  members  a   handout  illustrating  the                 
                                                                               
                               10                                              
                                                                               
                                                                               
  Perseverance  trail emergency repairs.   [Copy on file].  He                 
  provided an overview of that handout.                                        
                                                                               
  Representative Kohring  questioned the  "emergency" need  of                 
  the project.  He  urged that the request be addressed in the                 
  Capital  Budget   Request   (CBR).      Mr.   Bus   reminded                 
  Representative  Kohring  that  over  35,000 people  use  the                 
  trail.  It is necessary to begin the work in May  to be able                 
  to address  summer  tourism.   Representative Kohring  noted                 
  that the trail is used for recreation purposes only.                         
                                                                               
  Representative  J.  Davies  argued that  the  timing  of the                 
  project places it into the Supplemental Request category and                 
  that the impact  of not doing the work  now, would close the                 
  trail for the entire summer.                                                 
                                                                               
  Representative Martin  asked if tourism raised  enough money                 
  to address the concern and future repairs of  the area.  Mr.                 
  Bus replied that the user fee for tourism was $250 dollars a                 
  year.  He argued that the State of Alaska is the land owner,                 
  whose responsibility it is to keep the area safe.                            
                                                                               
  Representative  Martin  asked if  the  City of  Juneau would                 
  participate in covering the  costs.  Mr. Bus noted  that the                 
  City's  budget  was  limited  as  a  result  of  many  areas                 
  experiencing significant storm  damage this  year.  Mr.  Bus                 
  spoke to the  timing of  the repair work  noting that if  it                 
  commenced  on  May 1st,  it would  be  ready for  the summer                 
  tourists in early June.                                                      
                                                                               
  Representative J. Davies  asked if  the commercial use  fees                 
  were placed into the General Fund.  Mr. Bus informed members                 
  that  those  fees are  placed  into  the Division  of  Parks                 
  budget, and then used for operation purposes.                                
                                                                               
  Section 9(a)                                                                 
                                                                               
       $3,788.3 thousand dollars     -    Fire Suppression                     
                                                                               
  Mr.  Bus noted  that  the  request  would address  the  fire                 
  suppression budget from  January through  June, 1997.   Last                 
  year, the Department spent $7.8  million dollars and carried                 
  forward  $2.1  million dollars,  leaving  a balance  of $1.5                 
  million  dollars.   Costs  between now  and June,  1997, are                 
  estimated to be $5.3 million dollars.                                        
                                                                               
  Co-Chair  Hanley asked  the  amount of  fixed  costs in  the                 
  request.  Mr. Bus replied that  the fixed costs from January                 
  through  July,  would  be $2.3  million  dollars.   Co-Chair                 
  Hanley understood that the fixed costs would be addressed in                 
  the Operating Budget and that the "non-fixed costs" would be                 
  addressed  in  the  Supplemental Budget  Request.    Mr. Bus                 
                                                                               
                               11                                              
                                                                               
                                                                               
  replied that  the fixed  costs to  the Department were  $4.6                 
  million dollars, and  were divided  into two time  segments.                 
  Mr. Bus added  that the  increase to the  fixed cost  budget                 
  resulted from  long term contracts coming up  for renewal at                 
  higher amounts than originally contracted for.                               
                                                                               
  Section 9(c)                                                                 
                                                                               
       $100.0 thousand dollars  -    Old Eagle School Site                     
                                                                               
  Mr. Bus  informed Committee members  that this  supplemental                 
  request would  fund the  removal of  existing buildings  and                 
  facilities at the Old Eagle School  site and would allow for                 
  eventual remediation of contaminated soils at the site so to                 
  reduce health and safety hazards.   The request had resulted                 
  from a lawsuit which was filed by the Village of Eagle.  The                 
  judge ordered that the money be appropriated by  July, 1996.                 
                                                                               
                                                                               
  Co-Chair Hanley asked who built the  school.  Mr. Bus stated                 
  that it  was  purchased from  the Bureau  of Indian  Affairs                 
  (BIA).  To make the site useable, the buildings will need to                 
  be  cleaned up  and the  soil contamination addressed.   The                 
  Village of Eagle sued  the U.S. Government and the  State of                 
  Alaska.                                                                      
                                                                               
  BARBARA  RITCHIE, DEPUTY  ATTORNEY GENERAL,  CIVIL DIVISION,                 
  DEPARTMENT OF LAW,  noted that the settlement was adopted as                 
  an  order  of  the  Court.    The  U.S.  government  is  not                 
  contributing to the removal costs.   There is no evidence to                 
  indicate that  the contamination  existed in  1967 when  the                 
  State took title  of the property.  She stated, the State of                 
  Alaska is responsible for the clean-up costs and all hazards                 
  on the property.                                                             
                                                                               
  Ms. Ritchie continued,  the Village  of Eagle brought  their                 
  law suit against  the State in  order to bring the  property                 
  back to it's  original state.   The U.S. government and  the                 
  State of Alaska moved to dismiss the case based on sovereign                 
  immunity.  There  exists a statute  stipulating that a  suit                 
  can be brought  forward, if  the complaint is  filed by  the                 
  same entity who owned the property before the contamination.                 
  The United States  dismissed it, noting  that they were  not                 
  the former owner  of the  property.  The  judge denied  that                 
  action and requested a briefing in order to check the Alaska                 
  Native Claims Settlement Act (ANCSA) status of government at                 
  that time.                                                                   
                                                                               
  Co-Chair  Therriault  pointed  out  that  the  building  was                 
  "laced" with asbestos  before the State took  ownership from                 
  the  federal  government.   Ms.  Ritchie  assessed  that the                 
  asbestos  tiles were  in the floor  and were  not in  and of                 
                                                                               
                               12                                              
                                                                               
                                                                               
  themselves illegal.   If  they were  well maintained,  there                 
  would not be a release of fiber.  The problem developed when                 
  the State  purchased  the property,  and  it was  no  longer                 
  maintained.                                                                  
                                                                               
  Co-Chair Hanley  voiced his  frustration that  the State  is                 
  held  liable  for  an  REAA  responsibility.    Ms.  Ritchie                 
  reiterated that this  is State property  and that it is  not                 
  being operated by an REAA at this time.                                      
                                                                               
  Mr.  Nico  advised  that the  requested  funding  would only                 
  address  Phase I of  the project.   Following  completion of                 
  that,  the  oil  contamination  problem  would  need  to  be                 
  addressed.  This request  has been expedited because of  the                 
  Court settlement order completion by July 1, 1997.                           
                                                                               
  Ms. Ritchie reiterated  that there  are no facts  indicating                 
  that  a problem existed before the State took over ownership                 
  of the  property.   Committee members  noted their  surprise                 
  that the federal government would not be responsible for any                 
  of the costs.                                                                
                                                                               
  (Tape Change HFC 97-47, Side 2).                                             
                                                                               
  DEPARTMENT OF LAW                                                            
                                                                               
  Section 6(a)                                                                 
                                                                               
       0.0       -         Oil   and   gas   audits  &   legal                 
       proceedings                                                             
                                                                               
  FRED FISHER, DIRECTOR, DIVISION OF ADMINISTRATIVE  SERVICES,                 
  DEPARTMENT  OF LAW,  pointed out  that in  most years  since                 
  FY79,  the   Department   has   received   more   than   one                 
  appropriation per year for oil  and gas litigation purposes.                 
  Beginning in FY92,  the Legislature  changed that policy  by                 
  making only one appropriation per  year.  Consequently, from                 
  the  years  FY92  through  FY95,  the  Department  requested                 
  supplemental  appropriations,   although,  had   difficultly                 
  spending those appropriations by the end of the fiscal year.                 
  As  a result,  management policy  was to encumber  the funds                 
  received  late in  the  fiscal year  and  spend those  funds                 
  during  the  following  fiscal  year.    This  practice  was                 
  questioned last year by the Division of Budget and Audit, at                 
  which time, the Department requested  a lapse date extension                 
  which was granted by the Legislature.                                        
                                                                               
  Mr. Fisher spoke  to the available  options.  He noted  that                 
  concerns had been expressed with  tapping the Constitutional                 
  Budget Reserve (CBR) fund  3/4 vote.  Ms. Ritchie  noted her                 
  surprise by  handout  provided from  the  Governor's  Office                 
  recommending deletion of the request.  [Copy on file].                       
                                                                               
                               13                                              
                                                                               
                                                                               
  Mr. Fisher referenced  another option which would  request a                 
  General Fund supplemental in leu of the last date extension.                 
  An additional option  would be deleting the  entire section.                 
  He believed, to discontinue the current practice would place                 
  the  Department in a situation requiring future supplemental                 
  appropriations.                                                              
                                                                               
  Co-Chair  Hanley agreed that  there have been carry-forwards                 
  for many years.  He suggested  that the Department provide a                 
  budget which clarifies what they anticipate the need will be                 
  for  litigation.    Should  the  Department  have  unforseen                 
  circumstances, they will then come to the Legislature for  a                 
  supplemental.    Co-Chair Hanley  requested  no  more carry-                 
  forwards.                                                                    
                                                                               
  Mr. Fisher advised, of the $7 million dollars allocated, the                 
  Department has  spent $6.1 million  dollars and  anticipates                 
  using the  remainder before the end of  the fiscal year.  He                 
  pointed out that the request had been made in order to clear                 
  potential audit questions.                                                   
                                                                               
  Co-Chair Hanley noted  that a  split supplemental would  not                 
  create problems; carry-forwards create problems.  Mr. Fisher                 
  pointed out that  prior year costs  to the budget  generally                 
  are representative  of actual expenditures  and encumbrances                 
  as of  the end of the fiscal year.   That action has created                 
  confusion to oil and gas litigation costs.                                   
                                                                               
  Co-Chair Hanley  requested  a spread-sheet  of the  "actual"                 
  costs as well as  anticipated "actual" costs to be  spent by                 
  the Department over the year.  The chart should indicate the                 
  $7  million  dollars  that was  encumbered  in  the previous                 
  fiscal year and spent in this fiscal year.                                   
                                                                               
  Section 6(b)                                                                 
                                                                               
       $97.1 thousand dollars   -    Civil                                     
                                                                               
  Ms. Ritchie  provided Committee  with a  handout identifying                 
  additional FY97 judgments from  the General Fund.  [Copy  on                 
  file].  The list contains a total itemized request of $235.1                 
  thousand General Fund dollars.                                               
                                                                               
  Co-Chair Hanley asked if the Venetie versus State case was a                 
  judgement or settlement.   Ms.  Ritchie stated that  request                 
  was for $11.7 thousand dollar costs awarded to the plaintive                 
  by the federal District Court arising from the trial of that                 
  case.    The  request  does  not  cover  attorney  fees   or                 
  settlement  costs.     No  payment   was  involved  in   the                 
  settlement.                                                                  
                                                                               
                                                                               
                               14                                              
                                                                               
                                                                               
  She commented that  this was not  the Venetie case that  the                 
  State is currently  taking to the  Supreme Court.  The  case                 
  referenced  in Section  6(b) originated  in November,  1986,                 
  when the  IRA Councils  of Venetie  sued the  State and  the                 
  Commissioner of the Department of Health and Social Services                 
  for   an  injunctive   and  declaratory   relief  addressing                 
  substitute birth certificates.  The  State declined to issue                 
  the  birth certificates on the basis  that the Tribal Courts                 
  did not have the authority to undertake the adoption.                        
                                                                               
  Mr.  Ritchie continued,  the case  went to  the 9th  Circuit                 
  Court and then  remanded back  to the District  Court for  a                 
  trial  on  the  Tribal status  issue.    When  the case  was                 
  remanded, it was consolidated  for the purposes of a  trial.                 
  Eventually, the judge issued a decision on tribal status and                 
  Indian country.                                                              
                                                                               
  Ms. Ritchie noted that the request would cover costs accrued                 
  by the plaintiffs in  that case.  They also  sought attorney                 
  fees  which  Judge  Holland  denied.    The  issue  of  case                 
  addressed Tribal status and costs were awarded.                              
                                                                               
  Co-Chair  Hanley  noted  that  Alaska  Legal   Services  was                 
  representing the Venetie case.  Ms. Ritchie interjected that                 
  case  was  being  represented  by  Alaska  Legal   Services,                 
  although,  the  tax  case  was  represented  by  the  Native                 
  American Rights Fund.   Alaska Legal Services is  a private,                 
  non-profit,  established  by federal  law, and  recipient of                 
  funding  under  the  Legal  Service's  Act  appropriated  by                 
  Congress.  Legal Services is  allowed under federal law,  to                 
  represent any sort of group or  association if that group is                 
  composed of people  eligible for  that assistance under  the                 
  Legal Services Corporation Act.  That criteria is based upon                 
  income.                                                                      
                                                                               
  Representative J. Davies asked if  the interest column would                 
  increase.  Ms.  Ritchie replied that the interest column had                 
  been calculated through June 30, 1997.                                       
                                                                               
  Ms. Ritchie  noted that in 1996, Congress  amended the Legal                 
  Services  Act  to  prohibit  recipients  of  Legal  Services                 
  funding from collecting  attorney's fees.  That  prohibition                 
  applies to  all cases  after the  enactment date,  although,                 
  would not apply to  cases with pending issues prior  to that                 
  time.                                                                        
                                                                               
  HB 113 was HELD in Committee for further discussion.                         
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 4:29 P.M.                                           
                                                                               
                                                                               
                               15                                              

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