Legislature(1993 - 1994)
04/19/1994 08:35 AM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
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HOUSE FINANCE COMMITTEE
April 19, 1994
9:10 a.m.
TAPE HFC 94-132, Side 1, #000 - end.
TAPE HFC 94-132, Side 2, #000 - 319.
CALL TO ORDER
Co-Chair Larson called the House Finance Committee to order
at 9:10 a.m.
PRESENT
Co-Chair Larson Representative Hoffman
Co-Chair MacLean Representative Martin
Vice-Chair Hanley Representative Navarre
Representative Brown Representative Parnell
Representative Foster Representative Therriault
Representative Grussendorf
ALSO PRESENT
C.E. Swackhammer, Deputy Commissioner, Department of Public
Safety; Juanita Hensley, Chief Driver Services, Division of
Motor Vehicles, Department of Public Safety.
SUMMARY INFORMATION
HCR 32 Establishing the Joint Task Force on Military
Bases in Alaska.
HCR was reported out of Committee with "no
recommendation" and with a zero fiscal note by the
Legislative Affairs Agency.
HB 445 "An Act relating to operating or driving a motor
vehicle, commercial motor vehicle, aircraft, or
watercraft."
HB 445 was reported out of Committee with a "do
pass" recommendation and with a fiscal impact note
by the Department of Public Safety, dated 2/4/94;
and with three zero fiscal notes, two by the
Department of Administration, dated 2/4/94 and one
by the Department of Law, dated 2/4/94.
HB 541 "An Act providing for an advisory vote of the
people concerning a preferred alternative for
increasing revenue available to support state
government; and providing for an effective date."
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HOUSE CONCURRENT RESOLUTION NO. 32
Establishing the Joint Task Force on Military Bases in
Alaska.
Co-Chair MacLean MOVED to report HCR 32 out of Committee
with individual recommendations and with the accompanying
fiscal note. There being NO OBJECTION, it was so ordered.
Representative Brown expressed concern that the accompanying
zero fiscal note may not be adequate.
HCR was reported out of Committee with "no recommendation"
and with a zero fiscal note by the Legislative Affairs
Agency.
HOUSE BILL NO. 541
"An Act providing for an advisory vote of the people
concerning a preferred alternative for increasing
revenue available to support state government; and
providing for an effective date."
Co-Chair Larson noted that the legislation provides for an
advisory vote. The ballot provision asks citizens of Alaska
which alternative they prefer for raising revenues:
* A state income tax;
* A state sales tax; or
* Capping permanent fund earnings to be distributed
as earnings.
Co-Chair Larson expressed concern that comparable need to be
set to demonstrate how $450 to $500 million dollars could be
raised.
Representative Hanley maintained that comparisons need to be
drawn between the revenue each item would raise.
Representative Navarre suggested that the response to the
ballot question would be minimal. He observed that the
public wishes to see the budget cut. He stressed the need
to inform the public in regards to the over-all, long-term
state economic picture. He emphasized that there is a
misconception that the budget can be easily cut with no
impact or increased taxes. He observed that reduction in
state support for municipalities has resulted in an increase
in municipal taxes.
Representative Therriault suggested that a reduction of the
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budget should be added to the ballot question.
Representative Navarre emphasized that the perception that
the budget can be cut without impacts is inaccurate.
Representative Grussendorf expressed support for the
legislation.
Representative Martin noted that Alaska has experienced a
high voter turnout in past elections. He stressed that the
ballot question will generate discussion and provide
guidelines. He emphasized that it will allow citizens to
have a voice in the legislature's action.
Representative Grussendorf noted that the ballot question
does not address the use of the earnings income account in
the general fund.
Co-Chair MacLean stressed that varying levels of capping
permanent fund dividends should be discussed in the ballot
question.
Co-Chair Larson provided members with quotations regarding
permanent fund restrictions and the legislature's ability to
spend from the Fund's earnings reserve (copy on file). He
noted that:
* "All income from the permanent fund shall be
deposited in the general fund unless otherwise
provided by law." Article IX, Section 15, Alaska
Constitution
* "The income of the fund would be deposited into
the general fund without any permanent fund
restrictions." Jay S. Hammond, Governor, January
15, 1976
* "The purpose of the language in the last sentence
of the resolution is to give future legislatures
maximum flexibility in using the Fund's earnings
reserve..." Hugh Malone, Chairman House Finance
Committee on CSSSHJR 39
* "When the oil and gas is depleted, where will the
funds to feed our giant government come from? the
answer is: The Alaska Permanent Fund." 1976
Election Pamphlet in regards to proposition no. 2
* Each new legislature "is entitled to make its own
choices about the use of Fund earnings." Alaska
Permanent Fund 1991 Annual Report
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* "The purpose of the Constitutional Budget Reserve
Fund is to cushion the impact of reduced oil
revenue as oil production declines and state
revenues are depleted. Currently, state revenue
is not depleted. For example, there is presently
some $950,000,000 in the Permanent Fund Earnings
Account, available for appropriation by the
legislature." Superior Court Judge John Resse
Co-Chair Larson noted that $551 million dollars will be
distributed as dividends. An income tax would have to be
twice the amount it was when it was discontinued to raise
the equivalent amount. A state sales tax would have to be
set at approximately 20 percent to raise equal revenues. He
stressed the need to open options to the legislature.
Representative Brown stressed that options should be
parallel. She noted that there are other options not on the
list. She suggested that voters choose two of five or six
options. She suggested that an option of other taxes could
include motor fuel, alcohol, cigarette, flat employment,
fish, and mining taxes. She added that specific items could
be identified for budget cuts. She concluded that the
inclusion of more options would allow a lower threshold per
item. She suggested that increased oil taxes and a state
wide property tax should also be included. She suggested an
interim commission be created to address the issue of
raising revenues.
Co-Chair MacLean stressed that the Alaska Permanent Fund
needs to be revisited. She suggested that the amount used
as inflation proofing is too high.
Representative Martin expressed support for HB 541 as
drafted. He felt that too many options would be confusing.
He did not want an interim commission to replace the
legislation.
Representative Navarre observed that a state sales tax would
be difficult to administer. He emphasized that the
legislature holds the economic future of the state. He
stressed that if the economic structure, including the tax
structure, is not addressed the state will be lead into
economic collapse.
Co-Chair Larson noted that the public perception is not
favorable. He questioned if there should be additional
options.
Representative Hanley observed that the public would choose
to cut the budget instead of raising taxes. He stressed the
need to educate the public. He emphasized that the more
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options added the more difficult the process to educate.
Representative Hanley suggested that the legislature state
that: "The total state general fund spending budget for FY
95 is approximately $2.5 billion dollars. If prices for
Alaskan oil average $14 dollars a barrel for that year, the
total general fund recurring revenues are anticipated to be
$1.7 billion dollars. That leaves a gap of $800 million
dollars that we are currently using savings accounts to
fill."
Representative Hanley suggested that the legislation also
state: Each of the following alternatives would fill $250
to $300 million dollars of that gap. Pick no more than 2
options. He stated that he would add: Cut the budget by 10
percent.
Representative Hanley noted that to raise the $250 to $300
million dollars, a sales tax would have to be 10 percent and
dividends would have to be capped at $500 dollars.
Representative Grussendorf noted a lack of clarity on the
dividend question. He emphasized that the state operating
budget does not contain many mid management level jobs. He
suggested that the legislature consider contracting for a
survey.
Representative Navarre stressed that the option to cut the
budget by 10 percent is misleading. He emphasized that the
budget is over inflated by the inclusion of program
receipts, federal matching funds, shared taxes and education
funding.
Representative Brown noted that no one has advocated a state
sales tax as a viable alternative. She suggested that the
state sales tax option be deleted. She accented that
choices should be feasible to implement.
Representative Martin argued that the ballot question will
educate voters and that all options should remain.
(Tape Change, HFC 94-132, Side 2)
Co-Chair Larson expressed his intention to add other options
to the legislation.
HB 541 was HELD in Committee for further discussion.
HOUSE BILL NO. 445
"An Act relating to operating or driving a motor
vehicle, commercial motor vehicle, aircraft, or
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watercraft."
C.E. SWACKHAMMER, DEPUTY COMMISSIONER, DEPARTMENT OF PUBLIC
SAFETY stressed that the legislation addresses the high rate
of alcohol and drugs involved in state accidents. He noted
that Alaska is number two in the nation in terms of alcohol
related traffic crashes. He explained that HB 445 changes
the implied consent law to allow for chemical testing of
individuals involved in fatal or serious injury accidents.
In response to a question by Representative Brown, Mr.
Swackhammer noted that the legislation does not increase the
penalty for the crime of injuring someone. He clarified
that the information will be used to identify impaired
drivers that cause fatal or serious injury. He noted that
currently there must be an arrest in order to obtain blood
or urine. He stressed that in most serious injury or fatal
accidents it is not practical for the officer to make an
arrest because the state would be liable for medical costs
if the person is arrested. Samples would be taken at the
hospital. He explained that 95 percent of the effected
persons would be in the hospital due to the nature of the
accident. In most cases the blood or urine would be already
drawn. The legislation would provide access to the samples.
Representative Martin referred to section one.
JUANITA HENSLEY, DIRECTOR, DIVISION OF MOTOR VEHICLES,
DEPARTMENT OF PUBLIC SAFETY clarified that section one is
existing statute allowing administrative license revocation
for a person who takes the breath test and goes 1.0 or
greater, or for those that refuse the test under the implied
consent law.
Representative Grussendorf referred to page 4, lines 22 to
31. He expressed concern with self incrimination. Ms.
Hensley observed that other states have similar laws. She
added that existing statutes allow the automatic drawing of
blood if a person is unconscious. She stressed that the
legislation would only effect serious injury or fatal
accidents. She explained that if an individual refuses they
will be subject to the same penalties as an intoxicated
driver.
In response to a question by Representative Brown, Mr.
Swackhammer stated that the use of drugs or controlled
substances are not easy to detect during investigation.
Representative Navarre clarified that the accident would
provide reasonable cause.
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In response to a question by Representative Therriault, Mr.
Swackhammer explained that in the case of an arrest the
Department of Public Safety can forcibly take blood samples.
He reiterated that it is not practical to make an arrest
because in most cases the person is hospitalized.
Mr. Swackhammer assured Representative Brown, that drugs
administered at the hospital would be taken into account.
Co-Chair MacLean MOVED to report HB 445 out of Committee
with individual recommendations and with the accompanying
fiscal note.
Representative Brown questioned the Department of Public
Safety's fiscal note. Mr. Swackhammer acknowledged that the
department would be eligible for federal funds under the
enactment. He added that there would be a savings do to
samples that would not be sent out for examination.
There being NO OBJECTION to the motion to report HB 445 from
Committee, it was so ordered.
HB 445 was reported out of Committee with a "do pass"
recommendation and with a fiscal impact note by the
Department of Public Safety, dated 2/4/94; and with three
zero fiscal notes, two by the Department of Administration,
dated 2/4/94 and one by the Department of Law, dated 2/4/94.
ADJOURNMENT
The meeting adjourned at 10:11 a.m.
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