Legislature(2003 - 2004)
04/09/2003 01:45 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
April 09, 2003
1:45 P.M.
TAPE HFC 03 - 55, Side A
TAPE HFC 03 - 55, Side B
CALL TO ORDER
Co-Chair Williams called the House Finance Committee meeting
to order at 1:45 P.M.
MEMBERS PRESENT
Representative John Harris, Co-Chair
Representative Bill Williams, Co-Chair
Representative Kevin Meyer, Vice-Chair
Representative Mike Chenault
Representative Eric Croft
Representative Richard Foster
Representative Mike Hawker
Representative Reggie Joule
Representative Carl Moses
Representative Bill Stoltze
Representative Jim Whitaker
MEMBERS ABSENT
None
ALSO PRESENT
Representative Tom Anderson; Anne Carpeneti, Assistant
Attorney General, Criminal Division, Department of Law; Eddy
Jeans, Manger, School Finance and Facilities Section,
Department of Education and Early Development; Greg
O'Claray, Commissioner, Department of Labor and Workforce
Development
PRESENT VIA TELECONFERENCE
Chris Beheim, Director, State Crime Lab, Anchorage; Bruce
Richter, Program Manager, National Law Enforcement and
Correctional Technology Center, Anchorage; Jennifer Esteral,
American Civil Liberties Union (ACLU), Anchorage; Linda
Wilson, Deputy Public Defender, Anchorage; John Wheatley,
Senior Vice President, Brady Company, Insurance Brokerage
Firm, Anchorage; Terry Fike, President, Alcan General
Contractors, Anchorage; Dick Cattanach, Executive Director,
Associated General Contractors, Anchorage; Vince Beltrami,
President, Anchorage Building and Construction and Trades
Council, Anchorage; Nancy Peterson, City of Valdez; Phil
Anderson, President, AGC Landscaping, Fairbanks; Sarah
Lefebvre, Vice President, Exclusive Landscaping and Paving,
Fairbanks
SUMMARY
HB 49 An Act relating to the DNA identification
registration system; and providing for an
effective date.
CS HB 49 (JUD) was reported out of Committee with
a "do pass" recommendation and with zero fiscal
note #1 by the Department of Public Safety, zero
fiscal note #2 by the Department of Law, and
fiscal note #3 by the Department of
Administration.
HB 155 An Act relating to the submission of payroll
information by contractors and subcontractors
performing work on a public construction contract;
and providing for an effective date.
HB 155 was HEARD and HELD in Committee for further
consideration.
HB 171 An Act repealing the charter school grant program;
and providing for an effective date.
HB 171 was reported out of Committee with
"individual" recommendations and with fiscal note
#1 by the Department of Education & Early
Development.
HOUSE BILL NO. 49
An Act relating to the DNA identification registration
system; and providing for an effective date.
REPRESENTATIVE TOM ANDERSON noted that HB 49 would expand
the Alaska State database of DNA samples to include all
persons convicted of a crime against a person or any felony
under Alaska's criminal code. It would also require the
collection of DNA samples from those juveniles adjudicated
as a delinquent for the same offense. Additionally, HB 49
makes provisions for volunteer and anonymous donations.
Persons required registering, as sex offenders are also
required to submit DNA into the database. HB 49 would
require that all offenders and minors currently incarcerated
on State supervised parole for felony convictions or certain
sexual misdemeanor offenses provide samples to the
Department of Public Safety.
Representative Anderson stated that expanding the databases
to include all convicted offenders would have multiple
benefits:
· Solves crimes - DNA collection from all convicted
felons, rather than just sex offenders and perpetrators
of serious violent crimes, which would result in an
increase in the amount of violent crimes solved.
Offenders who are required to submit DNA when convicted
of non-violent felonies would be identified as they
leave DNA behind at a rape and/or murder scene.
· Prevents crimes, helps solving a crime, and solving it
quickly, which has a direct effect on preventing
additional crimes by the same perpetrator. An offender
who is not apprehended in a timely manner remains free
to commit more crimes.
· Exonerates the innocent - Increases the DNA database to
those convicted of non-violent offenses, which would
reduce the occurrence of innocent people who are
wrongly suspected, arrested and convicted of crimes
they did not commit. Two common scenarios exemplify
how a larger DNA database protects such innocent
people, one where the guilty party is listed and
secondly, where the innocent party is in the database.
· Increases Cost Efficiencies - According to a study
completed by the National Institute of Justice, rape is
the costliest crime in America, in which victim costs
can total up to $127 billion dollars. The study
estimated that when all factors are considered, the
estimated cost of rape per victim is $87,000. If the
average rapist commits eight rapes, but a DNA databank
stops the offender half way through the spree, then
four rapes are prevented creating a savings of $348,000
dollars.
Representative Anderson identified the numerous agencies
indicating support and letters of endorsement ranging from
the Chief of Police Association to the Alaska Peace Officers
Association. The fiscal note indicates zero because federal
funding is concurrent with the program. President Bush has
indicated that he intends to supplement this cause with over
$1 billion dollars of continuous funding for the program to
make it state and nationwide.
Representative Croft referenced Page 3, Lines 27 & 28, "law
enforcement cases including". He asked if there was any
limitation on the law enforcement. He stated he was
concerned about how broad that language was.
Representative Anderson explained that language was taken
from original law. He assumed that the federal government
and the Federal Bureau of Investigation (FBI) has different
regulations, however, they would be able to utilize the same
information through the coded system.
Representative Croft mentioned the "parameters" of the
language. He questioned the basic protections in the bill
from misuse. Representative Anderson referred that question
to Ms. Carpeneti from the Attorney General's Office,
Department of Law.
Co-Chair Harris referenced the indeterminate fiscal note
from the Department of Administration, Public Defender
Agency. He asked what would happen if that note was zeroed
out.
LINDA WILSON, (TESTIFIED VIA TELECONFERENCE), DEPUTY PUBLIC
DEFENDER AGENCY, ANCHORAGE, commented that their agency
cannot predict what the fiscal impact is going to be. Ms.
Wilson claimed that the legislation would significantly
increase the number of cases for the number of crimes, which
a person may have to submit a sample. There currently are
32 offenses and the legislation would add over 80 more for
which a person must submit a DNA sample. The legislation
would include those on probation or parole on the effective
date. That creates a very broad reach. Ms. Wilson had no
idea how many cases it would include. She reiterated that
the note was indeterminate because there is no way for the
Agency to predict the impact.
Co-Chair Harris inquired if the Public Defender Agency had
received a supplemental request this year. Ms. Wilson
acknowledged that they had.
CHRIS BEHEIM, (TESTIFIED VIA TELECONFERENCE), DIRECTOR,
STATE CRIME LAB, ANCHORAGE, testified that the DNA database
has had a positive impact on law enforcement. It has aided
34 different investigations this past year. The State of
Alaska has one of the more successful databases in the
country. He added that the State could do better by
collecting the DNA from all felons and individuals convicted
of sex offenses. Mr. Beheim reiterated that the legislation
could enhance the current system even more.
At this time, there are approximately 140 unsolved homicides
and sexual assault cases and with an expanded database, the
number of unsolved crimes could increase. He concluded that
this is an extremely important tool for law enforcement that
is cost effective.
BRUCE RICHTER, (TESTIFIED VIA TELECONFERENCE), PROGRAM
MANAGER, NATIOANL LAW ENFORCEMENT AND CORRECTIONAL
TECHNOLOGY CENTER, ANCHORAGE, stated that the legislation
would be the single most cost effective tool that the State
could give law enforcement for expanding their reach of the
database. The success of other states could be reflected in
what will happen in Alaska. Mr. Richter trusted that the
down-stream federal funding would come.
Representative Croft inquired about the Alaskan success
stories. Mr. Beheim listed various sexual assault
situations that have occurred throughout the State and how
the DNA technology helped solve those crimes. He elaborated
that this indicates the power of DNA to both exonerate and
bring people to justice.
JENNIFER ESTERAL, (TESTIFIED VIA TELECONFERENCE), AMERICAN
CIVIL LIBERTIES UNION (ACLU), ANCHORAGE, voiced opposition
to the proposed bill. She noted that ACLU urges an end to
the progressive expansion of the collection of the DNA. She
stressed that this is not only fingerprinting and that DNA
provides the government control over personal and private
information. Ms. Esteral stressed that the laws are
becoming progressively more inclusive. DNA is now being
collected before the crime has happened.
Ms. Esteral pointed out that the ACLU supports the use of
DNA database for positive medical, scientific, and forensic
purposes; however, she stressed that there is tremendous
potential for abuse and that HB 49 does not create any
safeguards.
Representative Joule asked if there had been cases of misuse
from the DNA collection base. Mr. Beheim responded that
there has never been a case where the DNA database sample
was misused. He added that there are many safeguards
involved. It can be used only for identification and law
enforcement identification purposes.
Mr. Richter added that once that the crime lab has made
confirmation of identification, that information serves as
the application base for a search warrant. He emphasized
that there are checks and balances built into the current
system.
ANNE CARPENETI, ASSISTANT ATTORNEY GENERAL, LEGAL SERVICES
SECTION, CRIMINAL DIVISION, DEPARTMENT OF LAW, voiced the
Department's support for the bill and offered to answer
questions of the Committee.
Representative Croft questioned if there should be any
constraints placed on law enforcement use of the DNA. Ms.
Carpeneti explained the language referenced currently is in
existing law. She pointed out that the word "including" was
added because law enforcement attempted to identify missing
body parts from victims. That language has been effective
since the DNA concern was enacted. She interjected that
there have been no problems to date and that the bill does
contain protections.
Representative Whitaker commented on the possible
elimination of federal funding and that the Legislature
should recognize the potential costs associated with the
bill. He voiced his support.
Representative Foster MOVED to report CS HB 49 (JUD) out of
Committee with individual recommendations and with the
accompanying fiscal notes.
There being NO OBJECTION, it was so ordered.
CS HB 49 (JUD) was reported out of Committee with a "do
pass" recommendation and with zero fiscal note #1 by the
Department of Public Safety, zero fiscal note #2 by the
Department of Law, and fiscal note #3 by the Department of
Administration.
HOUSE BILL NO. 171
An Act repealing the charter school grant program; and
providing for an effective date.
EDDY JEANS, MANGER, SCHOOL FINANCE AND FACILITIES SECTION,
DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT, explained
that the HB 171 would eliminate charter school grants. The
State grant program implemented in FY2002, allocates money
per ADM for each new charter school. The funding was
intended to supplement the federal start up grants for
charter schools.
The Alaska Department of Education and Early Development is
working closely with U.S. Department of Education to
increase the level of start-up grants provided by the
federal government therefore eliminating the need for the
State supplemental grant program beginning in FY 2005. The
State will allocate to new charter schools $150,000 a year
for the first three years and $45,000 in the forth year,
totaling $495,000 dollars start up funds over a four year
period.
The bill becomes effective July 1, 2004. The delayed
implementation will allow the State to fulfill its
commitment of start-up grants to the existing charter
schools. Any new charter schools approved to operate in FY
2004 would be eligible for the federal grant funds.
Co-Chair Harris asked if the State could anticipate more
federal money. Mr. Jeans replied that was the "bottom
line".
Co-Chair Harris asked what would happen without the money.
Mr. Jeans advised that with the one-year delay, if the
federal funds do not come through, the Department would be
back before the Legislature requesting reinstitution of the
program. However, he added that every indication from the
federal government indicates that the grant request will be
looked upon favorably.
Co-Chair Harris asked the benefits of a charter school to
students and the State of Alaska. Mr. Jeans noted the
amount of parental involvement in those schools. Charter
schools are "grass root movements" and the parents are very
involved in the classrooms. Charter schools have
flexibility in their regulations; however, they are required
to follow the same assessments as the regular public
schools. Charter schools are public schools and have a
contract with their local school district to operate the
program.
Co-Chair Harris inquired how much the State provides for
each student in the charter school. Mr. Jeans explained
that would vary depending on the program. Some of the
charter school programs are correspondence programs and are
funded at 80%. The main difference results from the student
population of the charter school. If there are less than
150 students, the current foundation statute requires them
to be added to the local school in that district.
Therefore, their funding would be reduced. If they have
over 150 students, they are allowed to go through the school
size adjustment table just as any public school in the
district.
Co-Chair Harris asked if there were less than 150 students
in the charter school, would they then get added to the
regular school system and counted as such. Mr. Jeans
explained that in statute is the "school size adjustment
table", which adjusts for the student economy of scale.
Within that section of statute, it stipulates that before a
charter school is counted as a separate, independent school,
there must be more than 150 students. If there were not
that many students, it would be added to the largest school
for funding purposes. Mr. Jeans reiterated that if there
are over 150 students, they are then counted as their own
separate school.
Co-Chair Harris noted that the correspondence program is
separate. Mr. Jeans acknowledged that was correct, pointing
out that there are a couple charter schools funded as a
correspondence program. Those programs will be funded at
80%.
Vice-Chair Meyer inquired if there had been a statewide
increase in the charter school programs. Mr. Jeans
acknowledged that charter schools are on an increase
statewide. That is directly related to legislation passed
in 2001, which expanded the number from 30 to 60 charter
schools in the State that can be operated by districts. He
added that the State Board of Education just approved four
new charter schools for this upcoming year; (1) in Mat-Su,
(2) in Anchorage and (1) in Ketchikan.
Vice-Chair Meyer asked how much additional money does a
charter school receive. Mr. Jeans explained that there is
not an easy answer and that it does depend on the size of
the student population. The formula adjusts for economies
of scale. If there is a small school of 150 students, there
will be fixed costs associated, which would increase the
amount. The formula adjusts for the economies of scales.
Representative Croft pointed out that the State expects
money for the FY05 budget, not this year. Mr. Jeans
corrected Representative Croft pointing out that the State
expects to receive the money this year. The effective date
is FY04 because the Department is attempting to make the
districts that are under the current State program "whole".
That request is in the FY04 budget. Mr. Jeans added that
once the federal grants are closed, they cannot be reopened.
All new charter schools will be under the new federal
allocation for charter school start up.
Representative Croft asked about moving the State system and
shifting it over to the federal area. He inquired why
language should be repealed.
Representative Croft voiced concern about the possibility
that only part of the federal money might come through. Mr.
Jeans explained that the Department does not intend to
continue operating the State grant program. If the federal
money does not come through, the Department will come back
to the Legislature to determine if they want to reinstitute
the State grant program. He noted that Senator Dyson shared
that concern as well and put contingent language in the
Senate version of the bill, which would address the
repealler.
Representative Croft maintained that if the State can fully
utilize federal money now, the statute should remain on the
books in case the federal funds are not guaranteed. He did
not understand the need for the legislation.
Mr. Jeans advised that the reason that the Department
submitted the bill is that under the proposal before the
federal government, the State will be able to allocated more
money to the school districts through the federal program
than they receive for both programs currently combined. If
the State statute remains on the books, the State allows the
entitlement program to remain on the books for districts and
schools to continue to apply in the future for the State
grant. That would send a clear message that the intention
is to transition from the combined system to a single
system.
Co-Chair Harris asked why the fiscal note does not indicate
federal revenues. Mr. Jeans understood that there would be
sufficient federal authorization in the Teaching and
Learning Division to absorb the grant request.
Representative Foster MOVED to report HB 155 out of
Committee with individual recommendations and with the
accompanying fiscal.
There being NO OBJECTION, it was so ordered.
HB 171 was reported out of Committee with "individual"
recommendations and with fiscal note #1 by the Department of
Education & Early Development.
TAPE HFC 03 - 55, Side B
HOUSE BILL NO. 155
An Act relating to the submission of payroll
information by contractors and subcontractors
performing work on a public construction contract; and
providing for an effective date.
GREG O'CLARAY, COMMISSIONER, DEPARTMENT OF LABOR AND
WORKFORCE DEVELOPMENT, testified that the bill would be a
"revenue producer" for the State and would provide
sufficient regulations for proper enforcement of the
prevailing wage rate under Title 36. He stated that the
Administration supports the House Judiciary version of the
bill and it would be a cost shift from general funds.
Representative Joule inquired if costs were being shifted to
the bid processor on the "other side". Commissioner
O'Claray replied that there would be a cost shift. The
general contractor would pay for the cost. At present time,
there is no fee being charged for the service. The people
that use State services should pay their "fair share" in
supporting those services. He added that would be a minimal
charge.
Vice-Chair Meyer asked if HB 155 was the bill that had been
discussed in the Department of Labor Subcommittee and how
the proposed fiscal costs had been determined. Commissioner
O'Claray responded the fiscal note was new. The original
bill moved the recording requirement to the contracting
agency, therefore, eliminating a clerk position in the
Department of Labor & Workforce Development. Under the
proposed fiscal note there is a requirement for an
accounting tech employee to keep track of all the
information.
Vice-Chair Meyer pointed out the $14 thousand dollars fiscal
note difference. Commissioner O'Claray acknowledged that
was correct.
JOHN WHEATLEY, (TESTIFIED VIA TELECONFERENCE), SENIOR VICE
PRESIDENT, BRADY COMPANY, INSURANCE BROKERAGE FIRM,
ANCHORAGE, voiced concern about the bill. He noted that
that final payment would not be released until the
Department of Labor & Workforce Development verifies that
all the contractors on the project indicate that they paid
prevailing wage. The concern rests with the fact that the
contractor's receipt of final payment could be withheld. He
asked what would happen if the Department had a backlog of
work and needed to undertake an investigation. The time
line could lead to issues of cash flow, which is of concern
for many companies. He added that could lead to limitation
of bonding credit for the contractors. Mr. Wheatley
emphasized that this would be an unfair position to put the
contractors in.
TERRY FIKE, (TESTIFIED VIA TELECONFERENCE), PRESIDENT, ALCAN
GENERAL CONTRACTORS, ANCHORAGE, voiced strong disagreement
with the bill particularly in Section 2©, the withholding of
the final payment on a public construction contract. Mr.
Fike claimed that it is not appropriate to have the general
contractor sign an affidavit that they will pay Davis-Bacon
wages when they already agreed to that when the contract was
originally signed. In current law, the contractor is
required through public contract, to submit a weekly-
certified payroll. The general contractor has no way to
enforce that requirement. There are no rights to go to a
subcontractor's office and request to see his books to check
if they are paying Davis-Bacon wages. The general
contractors do not have the authority to do that and cannot
be held liable to sign an affidavit stating that they will
do that. Mr. Fike reiterated that there would be no way to
enforce that requirement. He inquired the time frame
expected final payment would be received.
DICK CATTANACH, (TESTIFIED VIA TELECONFERENCE), EXECUTIVE
DIRECTOR, ASSOCIATED GENERAL CONTRACTORS, ANCHORAGE, pointed
out areas of concern with the legislation.
· Section 1 - The report should be filed every second
week. He noted that in the House Labor and Commerce
Committee, he had suggested that it be filed
strd
consistently every two weeks, either on the 1 and 3
ndth
or on the 2 and 4 week and be consistent for
everyone.
· Section 2 © - Regarding withholding the final payment
against the contractor for acts of some sub contractor
that he has no control over. The contractor has no
legal authority over that person and there is no way
that the contractor could place pressure on that person
to sign the affidavit. That requirement would penalize
the contractor who abides by the law for another
persons action.
· Section 4 - Applies to on-going projects. The
contractor is responsible for getting the affidavit and
complying with Section 2© again.
Mr. Cattanach summarized that if the bill moves from
Committee, there is no question that the cost of public
construction will increase statewide. The bill extracts
money from the construction budget to the operating budget.
The bill would take the payments from the complying
contractors and delay them indefinitely until they meet the
conditions of 2©. Non-complying contractors would not be
penalized for their actions. Paper work associated with the
bill will skyrocket and will seriously drive up the
construction costs in the State of Alaska.
Representative Croft referenced Section 2© and asked what
language could help. Mr. Cattanach explained that if the
general contractor did not originally file the requested
affidavit, then the penalty would make sense. He, however,
questioned if payment should be held up for everyone
involved.
VINCE BELTRAMI, (TESTIFIED VIA TELECONFERENCE), PRESIDENT,
ANCHORAGE BUILDING AND CONSTRUCTION AND TRADES COUNCIL,
ANCHORAGE, noted that they oppose the bill. The Governor's
letter attached to the introduction of the bill stated that
there would be $1.15 million general fund dollars revenue
generated. Mr. Beltrami pointed out the cuts laid out for
the Title 36 program. He believed that there would be a
greater burden on the Department in keeping track of the
affidavits and bookwork. He understood that the Department
would loose the one and only wage and hour technician that
the State currently has. Contractors would be waiting on
the release of funds and waiting for the Department to sign
off on those funds with less staff.
Mr. Beltrami requested that the House Finance Committee
grant program receipt authority to the Title 36 program to
capture a portion of the $1.15 million dollars. He
recommended that action could help save the much needed
position in the Title 36 program and perhaps help to fund an
additional position to help with the increased
responsibilities so that the contractors would not be left
waiting for that final payment.
NANCY PETERSON, (TESTIFIED VIA TELECONFERENCE), CITY OF
VALDEZ, reiterated previous testimony concern with Section
2©. She commented that the held release of the funds causes
a burden to that City. If the building is done in a
reasonable time frame, then recommendations should be built
in.
PHIL ANDERSON, (TESTIFIED VIA TELECONFERENCE), PRESIDENT,
AGC LANDSCAPING, FAIRBANKS, spoke in strong opposition to
the proposed legislation. He maintained that the
legislation would place the contractor in a "working for the
Department of Labor & Workforce Development" position and
that he would have to collect his money from another State
agency. Mr. Anderson claimed that the funds that the
Department expects to receive would end up costing the State
more on the other end. To hold up final payment, the State
would be obligated to pay interest. The Department would be
penalizing not just the Department of Labor & Workforce
Development and other state agencies through interest and
user fees but the construction companies would pass them on.
SARAH LEFEBVRE, (TESTIFIED VIA TELECONFERENCE), VICE
PRESIDENT, EXCLUSIVE LANDSCAPING AND PAVING, FAIRBANKS,
testified in opposition to the legislation. She commented
that if the purpose of the bill is to generate revenue to
the State then the legislation should be streamlined to
focus on revenue and eliminate the portion of the bill that
cause the problems. Section 2, Lines 4 - 22 is problematic.
She asserted that the affidavit process was unnecessary.
Ms. Lefebvre maintained that fees would be paid up front.
Representative Croft asked if penalties against the general
and subcontractors should be divided. Mr. Cattanach agreed
that would be more appropriate but cautioned that the
contractor could still be placed in a "contractual
loggerhead" with the subcontractor.
Representative Stoltze disapproved of the position paper
submitted by the Department of Labor. He noted that it had
not been dated and was not written on letterhead. He asked
that future correspondence from the Department be
appropriately submitted.
HB 155 was heard and HELD in Committee for further
consideration.
ADJOURNMENT
The meeting was adjourned at 3:01 P.M.
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