Legislature(1997 - 1998)

03/06/1998 01:50 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 6, 1998                                                
                   1:50 P.M.                                                   
                                                                               
TAPE HFC 98 - 57, Side 1.                                                      
TAPE HFC 98 - 57, Side 2.                                                      
                                                                               
CALL TO ORDER                                                                  
                                                                               
Co-Chair Therriault called the House Finance Committee                         
meeting to order at 1:50 P.M.                                                  
                                                                               
PRESENT                                                                        
                                                                               
Co-Chair Hanley   Representative Kelly                                         
Co-Chair Therriault   Representative Kohring                                   
Representative J. Davies  Representative Martin                                
Representative Grussendorf Representative Moses                                
Representative Foster  Representative Mulder                                   
                                                                               
Representative G. Davis was not present for the meeting.                       
                                                                               
ALSO PRESENT                                                                   
                                                                               
Representative Joe Ryan; Kathy Cronan, (Testified via                          
Teleconference), CEO, Charter North Star Behavioral Health                     
System, Anchorage; Barbara Brink, (Testified via                               
Teleconference), Prosecuting Attorney, State of Alaska,                        
Department of Law, Fairbanks; Theresa Tanoury, Child                           
Protection Services Administrator, Division of Family and                      
Youth Services, Department of Health and Social Services;                      
Elmer Lindstrom, Special Assistant, Office of the                              
Commissioner, Department of Health and Social Services;                        
Mike Tibbles, Staff, Representative Gene Therriault; Janice                    
Adair, Director, Division of Environmental Health,                             
Department of Environmental Conservation; Bob Bartholomew,                     
Deputy Director, Income and Excise Audit Division,                             
Department of Revenue.                                                         
                                                                               
SUMMARY                                                                        
                                                                               
HB 16 An Act relating to delinquent minors, to the                             
taking of action based on the alleged criminal                                 
misconduct of certain minors, to the services to                               
be provided to the victims of criminal misconduct                              
of minors, and to agency records involving minors                              
alleged to be delinquent based on their criminal                               
misconduct; and amending Rule 19 and repealing                                 
Rules 6, 7, 11(a), 12(a), and 21(f), Alaska                                    
Delinquency Rules.                                                             
                                                                               
 HB 16 was HELD in Committee for further                                       
consideration.                                                                 
                                                                               
HB 144 An Act authorizing the Department of                                    
Environmental Conservation to charge certain fees                              
relating to registration of pesticides and                                     
broadcast chemicals; and providing for an                                      
effective date.                                                                
                                                                               
HB 144 was HELD in Committee for further                                       
consideration.                                                                 
                                                                               
HB 239 An Act relating to the liability of motor fuel                          
dealers for payment of tax imposed on certain                                  
credit transactions involving motor fuel sales or                              
transfers that become worthless debts or on sales                              
or transfers to persons who declare bankruptcy;                                
and providing for an effective date.                                           
                                                                               
CS HB 239 was reported out of Committee with a                                 
"do pass" recommendation and with a fiscal note                                
by the Department of Revenue.                                                  
                                                                               
HB 321 An Act relating to trusts, to the prudent                               
investor rule, and to standards of care                                        
applicable to personal representatives,                                        
conservators, and trustees; and providing for an                               
effective date.                                                                
                                                                               
 HB 321 was reported out of Committee with a "do                               
pass" recommendation and with a zero fiscal note                               
by the Department of Commerce and Economic                                     
Development dated 2/18/98.                                                     
HOUSE BILL NO. 321                                                             
                                                                               
"An Act relating to trusts, to the prudent investor                            
rule, and to standards of care applicable to personal                          
representatives, conservators, and trustees; and                               
providing for an effective date."                                              
                                                                               
REPRESENTATIVE JOE RYAN urged the Committee's support in                       
passage of HB 321.  The bill would implement the Alaska                        
Trust Act which was passed last year.                                          
                                                                               
Representative Foster MOVED to report HB 321 out of                            
Committee with the individual recommendations and with the                     
accompanying fiscal note.  There being NO OBJECTION, it was                    
so ordered.                                                                    
                                                                               
HB 321 was reported out of Committee with a "do pass"                          
recommendation and with a zero fiscal note by the                              
Department of Commerce and Economic Development dated                          
2/18/98.                                                                       
HOUSE BILL NO. 239                                                             
                                                                               
"An Act relating to the liability of motor fuel                                
dealers for payment of tax imposed on certain credit                           
transactions involving motor fuel sales or transfers                           
that become worthless debts or on sales or transfers                           
to persons who declare bankruptcy; and providing for                           
an effective date."                                                            
                                                                               
Co-Chair Therriault MOVED that 0-LS0768\H, Glover, 3/6/98,                     
be the version before the Committee.  There being NO                           
OBJECTION, it was adopted.                                                     
                                                                               
MIKE TIBBLES, STAFF, REPRESENTATIVE GENE THERRIAULT,                           
highlighted the changes between the current working draft                      
and the original version of the bill.  He noted that in the                    
committee substitute the "findings" section had been                           
eliminated.  The second change, eliminated the three-year                      
credit limit and replaced it with five year per individual                     
distributor.  The final change removed Section F(2),                           
leaving only Subsection F.  He continued, as determined by                     
Legal Services, both Sections E and F were understood to be                    
mutually exclusive, however, Section E suggested a finite                      
time period, whereas, Section F suggested an infinite                          
period.  By addressing this section, a potential conflict                      
was eliminated.                                                                
                                                                               
Mr. Tibbles spoke to the proposed Amendment #2.  [Copy on                      
file].  He noted that the amendment would change "sale and                     
transfer" to "sales and transfers".  When billing, there                       
could be more than one particular sale.  Co-Chair                              
Therriault added that the action would make it an                              
aggregate, not a credit on a single transaction.                               
                                                                               
BOB BARTHOLOMEW, DEPUTY DIRECTOR, INCOME AND EXCISE TAX                        
DIVISION, DEPARTMENT OF REVENUE, spoke to the deletion of                      
Section F(2).  That section would limit any transaction,                       
which occurred right after bankruptcy.  The language was                       
confusing as to when the clock began.  The deletion made                       
the application simpler, clarifying the bill's credit while                    
not removing the State's protection.                                           
                                                                               
Mr. Bartholomew added, by removal of that language, the                        
State's protection would not be removed when reaching a                        
bankruptcy level or an IRS write off to be eligible.  The                      
credit continues to work and yet does have safety valves.                      
                                                                               
Co-Chair Therriault MOVED to adopt Amendment #2.  There                        
being NO OBJECTION, it was adopted.                                            
                                                                               
Representative Grussendorf proposed and MOVED that a                           
conceptual amendment be added stipulating that the bill                        
have a five-year sunset clause.  There being NO OBJECTION,                     
the amendment was adopted.                                                     
                                                                               
For the record, Representative Kohring voiced his                              
opposition to the addition of the sunset clause.                               
                                                                               
Representative Foster MOVED to report CS HB 239 (FIN) out                      
of Committee with individual recommendations and with the                      
accompanying fiscal note.  There being NO OBJECTION, it was                    
so ordered.                                                                    
                                                                               
CS HB 239 (FIN) was reported out of Committee with "no                         
recommendation" and with a fiscal note by the Department of                    
Revenue.                                                                       
HOUSE BILL NO. 144                                                             
                                                                               
"An Act authorizing the Department of Environmental                            
Conservation to charge certain fees relating to                                
registration of pesticides and broadcast chemicals;                            
and providing for an effective date."                                          
                                                                               
JANICE ADAIR, DIRECTOR, DIVISION OF ENVIRONMENTAL HEALTH,                      
DEPARTMENT OF ENVIRONMENTAL CONSERVATION (DEC), informed                       
Committee members that the language referencing direct and                     
indirect costs would limit the Department by charging only                     
direct costs.  The stipulation has been part of AS                             
44.60.025(a) since it was first adopted by the Legislature                     
in 1990 in passage of HB 85.                                                   
                                                                               
Direct versus Indirect Costs.  Ms. Adair stated that in                        
1993, when the Legislature passed legislation establishing                     
the comprehensive air program in the State (HB167), it                         
included what is now AS 44.46.025(c), and allowed DEC to                       
include in its air permit fees both direct and "indirect"                      
costs.  Adding the authority for "indirect" costs was                          
necessary because AS 46.14.400(h), also a part of HB 167,                      
prohibits the Department from delegating or enabling                           
another department or government entity (i.e.                                  
municipalities) from establishing air permit fees or                           
collecting them.  Therefore, since the air fees established                    
by DEC were intended to cover the costs of a municipality                      
that might run the air permitting program rather than just                     
the department's own costs of providing the service, the                       
term "indirect" was added to give the necessary authority.                     
                                                                               
Other Services Provided by the Department.  Ms. Adair spoke                    
to the language, which originated in AS 44.46.025(a)(1)                        
relating to the food and public facility activities of DEC.                    
The language was moved into the introductory paragraph of                      
AS 44.46.025(a) as part of SB 99, which passed the                             
Legislature in 1993.                                                           
                                                                               
The language was moved in recognition of the fact that                         
there are a number of other services the Department                            
provides which directly benefit individuals.  The                              
Legislature wanted DEC to charge for those services.  Ms.                      
Adair noted, currently, the types of services charged for                      
that are not included as part of an inspection, permit                         
preparation, administration or plan review and approval                        
include:                                                                       
                                                                               
? Laboratory analyses of food products for export;                             
? Certification of seafood products for export;                                
? Certificates of Origin for seafood products for                              
export;                                                                        
? Sanitary surveys of public drinking water                                    
systems;                                                                       
? Domestic wastewater installer certification;                                 
? Dog and cat health certificates;                                             
? Food Service facility recognition program                                    
(planned);                                                                     
? Monitoring waivers for public drinking water                                 
systems;                                                                       
? Determinations of whether or not a public water                              
system is groundwater under the direct influence                               
of surface water;                                                              
? Determination of optimal corrosion control for a                             
public water system that exceeds the lead and                                  
copper action levels;                                                          
? Certified Pool and Spa operator training;                                    
? Various other training opportunities as they                                 
arise and are needed.                                                          
                                                                               
Ms. Adair continued, there are some services in the current                    
statuary list for which the Department can charge fees that                    
are not part of an inspection permit or plan approval.  The                    
proposed amendment to the introductory paragraph would make                    
the Department's authority to charge a fee for those                           
services highly questionable.                                                  
                                                                               
This would create a problem of funding, not authority.  In                     
a program that is heavily reliant on fees, every hour of an                    
employee's time must be charged to a project.  The costs                       
incurred by answering questions about a facility or permit                     
have to be covered.  The only way to do that is to charge                      
the costs to the project because there are insufficient                        
general funds to cover the costs.                                              
                                                                               
Water and Wastewater Operator Training.  Ms. Adair noted                       
that in this section, DEC specifies how to address the                         
advisory board because they cover the training and                             
certification of operators for certain public water and                        
wastewater systems.  The primary authority used for                            
domestic wastewater certified installers program is found                      
in AS 46.03.020(a)(10)(D).                                                     
                                                                               
Prohibition on Hourly Fees.  She noted that hourly fees are                    
"tough" for the Department.  The reason that they exist is                     
that those who pay these fee have asked for them.                              
Currently, the only fees on the books that would be                            
affected by the prohibition are the solid waste fees.  For                     
the new industrial solid waste component, the prohibition                      
would create a large problem since the Department was given                    
direction by the Legislature, last session, to make that                       
aspect of the solid waste program fully funded by fees.                        
                                                                               
Reimbursement Agreements.  Ms. Adair pointed out that the                      
Department's ability to enter into these funding                               
arrangements has been supported in previous testimony                          
before the Committee.  These arrangements are used for                         
large development projects, primarily mines.  They                             
essentially pay the cost for DEC services.  Ms. Adair                          
thought that for site-specific determinations in the water                     
quality program area, an hourly fee would be the fairest                       
fee to establish.                                                              
                                                                               
Pesticide registration.  Ms. Adair continued that if the                       
Department has fees strictly based on the cost to the                          
Department to register a pesticide product, it would be                        
approximately $100 dollars per label.  However, the                            
Department needs only to cover the match for the federal                       
pesticide grant.  If pesticides are not divided into                           
categories, it would appear that a $50 dollar per label fee                    
for all products would bring in enough money to provide the                    
match.  She recommended that a $50 dollar label might be                       
too high, depending on how many of the 2,000-3,000                             
pesticides the market survey found being sold in the State.                    
                                                                               
Ms. Adair pointed out that the distinction between a                           
household pesticide and a non houseshold pesticide made in                     
the bill is problematic for the Department.  She added that                    
if categories had to be divided, it would be much easier to                    
determine between restricted use and non-restricted use                        
pesticides.  If these categories were to be delineated, it                     
would become an administrative nightmare for the Department                    
and the companies involved.                                                    
                                                                               
Co-Chair Therriault asked how many chemicals registered in                     
the State would fall under "restricted".  Ms. Adair noted                      
that it would be the smallest amount presented.  She added                     
that the Department's proposed number of 2,000 - 3,000 was                     
based on a recently conducted market survey.  She pointed                      
out that Alaska does not have a lot of pesticides being                        
used in comparison to other states.  Most of the                               
agriculture here is organic.  She reiterated that the                          
determination is problematic and is another reason why the                     
Department would like to have the fee established in a                         
regulatory process which matches the federal grant.                            
                                                                               
Co-Chair Therriault commented that the proposed committee                      
substitute would not preclude the Department from entering                     
into the reimbursable service agreement.                                       
                                                                               
Ms. Adair noted that the proposed water fees are creating                      
angst and that they have not gone out for public comment                       
yet.  She stated that many changes occur during the public                     
comment process.                                                               
                                                                               
Co-Chair Therriault asked if there was an appeal process                       
available for those who want to challenge their permit                         
application.  Ms. Adair replied there is.  Some cases have                     
been more informal than others.  The regulations are in the                    
process of being amended.                                                      
                                                                               
Co-Chair Therriault questioned if training Department                          
personnel was included in the fees.  Ms. Adair responded                       
that the hourly fees only cover the actual personnel                           
service costs plus a certain percentage of the common                          
costs.  The fees do not cover costs associated with travel                     
or training.  This requires a well-trained staff.  Ms.                         
Adair concluded her testimony.                                                 
                                                                               
HB 144 was HELD in Committee for further consideration.                        
                                                                               
(Tape Change HFC 98- 57, Side 2).                                              
HOUSE BILL NO. 16                                                              
                                                                               
"An Act relating to delinquent minors, to the taking                           
of action based on the alleged criminal misconduct of                          
certain minors, to the services to be provided to the                          
victims of criminal misconduct of minors, and to                               
agency records involving minors alleged to be                                  
delinquent based on their criminal misconduct; and                             
amending Rule 19 and repealing Rules 6, 7, 11(a),                              
12(a), and 21(f), Alaska Delinquency Rules."                                   
                                                                               
Co-Chair Therriault questioned the fiscal impact of the                        
legislation.                                                                   
                                                                               
THERESA TANOURY, ADMINISTRATOR, CHILD PROTECTION SERVICES,                     
DIVISION OF FAMILY AND YOUTH SERVICES, DEPARTMENT OF HEALTH                    
AND SOCIAL SERVICES, commented that there are two ways for                     
a child to be placed in a locked facility.  The first is if                    
the child commits a delinquent act; the other is through                       
the mental health commitment door if that child presents a                     
danger to himself or others.                                                   
                                                                               
She spoke to the situation of a child falling under the                        
"Children needing aid Statutes".  The Department has                           
increasingly witnessed that group of kid's need the locked                     
and more secured care.  The Department supports Amendment                      
out that many physicians across the State have recommended                     
more locked and secure settings for these youth. Often                         
times, youth need to be moved out of State for this level                      
of care.                                                                       
                                                                               
Ms. Tanoury noted that Medicaid has changed the way the                        
Department provides secure settings for these children.  At                    
present time, the average stay is 3 to 5 days.  Amendment                      
Division by broadening the definition so that residential                      
care providers could be better utilized.                                       
                                                                               
KATHY CRONEN, (TESTIFIED VIA TELECONFERENCE), CEO, CHARTER                     
NORTH STAR BEHAVIORAL HEALTH SYSTEM, ANCHORAGE, commented                      
that the amendments proposed to HB 16 are critical in                          
providing comprehensive treatment for this classification                      
of youth in Alaska.  Expanding the continuum of care by                        
adding semi-secure and secure residential treatment centers                    
will provide in-State treatment for youth.                                     
                                                                               
There is a large group of in-need youth that do not or                         
cannot travel outside the State.  These children's needs                       
are attempted to be met by having multiple admissions to                       
acute care inpatient psychiatric facilities.  She stressed                     
that this is not optimal clinical treatment and that in the                    
long run, it is more expensive.                                                
                                                                               
Ms. Cronen advised that these children do not belong in                        
acute care hospitals.  Their symptoms or behavior cannot be                    
adequately addressed in a 2-week period.  They need long                       
term treatment.                                                                
                                                                               
A small group of children cannot safely be maintained in a                     
semi-secure setting.  The children may be sexual                               
perpetrators, chronic runners, sniffers or haffers who have                    
failed at or left the semi-secure program.  She stressed                       
that they need a locked facility.  The secure residential                      
psychiatric treatment center proposed in the amendment                         
would be such a facility.  Ms. Cronen emphasized that both                     
the semi-secure and the secure facilities are vitally                          
important pieces of the treatment continuum.                                   
                                                                               
BARBARA BRINK, (TESTIFIED VIA TELECONFERENCE), PROSECUTING                     
ATTORNEY, DEPARTMENT OF LAW, FAIRBANKS, asked for more time                    
to adequately digest the language proposed in Amendment #1.                    
Co-Chair Hanley requested that Ms. Brink also address if                       
the Department would be fiscally affected by adopting the                      
proposed amendments.                                                           
                                                                               
Representative J. Davies distributed Amendments #2 & #3.                       
[Copies on file].  He stated that the amendments would                         
provide options regarding fiscal obligations.  Amendment #2                    
would remove all dual sentencing, thus reducing the fiscal                     
impact.  Amendment #3 would remove 13, 14 and 15 years olds                    
from the effective dual sentencing, making the language                        
more permissive.  He believed that language in Amendment #3                    
would reduce the original bill's fiscal note by about $57                      
thousand dollars.                                                              
                                                                               
Representative Kelly distributed Amendment #4.  [Copy on                       
file].  He noted that the amendment would repeal a drafting                    
oversight.                                                                     
                                                                               
HB 16 was HELD in Committee for further consideration.                         
ADJOURNMENT                                                                    
                                                                               
The meeting adjourned at 2:50 P.M.                                             
                                                                               
                                                                               
H.F.C. 10 3/06/98 p.m.                                                         

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