Legislature(2001 - 2002)
03/14/2001 02:20 PM House RES
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
March 14, 2001
2:20 p.m.
MEMBERS PRESENT
Representative Drew Scalzi, Co-Chair
Representative Hugh Fate, Vice Chair
Representative Joe Green
Representative Mike Chenault
Representative Lesil McGuire
Representative Gary Stevens
Representative Beth Kerttula
MEMBERS ABSENT
Representative Beverly Masek, Co-Chair
Representative Mary Kapsner
COMMITTEE CALENDAR
HOUSE BILL NO. 108
"An Act relating to the accounting for and appropriation of fees
for recording and related services by the Department of Natural
Resources; and providing for an effective date."
- MOVED HB 108 OUT OF COMMITTEE
PREVIOUS ACTION
BILL: HB 108
SHORT TITLE:DEPT NATURAL RESOURCES RECORDING FEES
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
Jrn-Date Jrn-Page Action
02/05/01 0239 (H) READ THE FIRST TIME -
REFERRALS
02/05/01 0239 (H) RES, FIN
02/05/01 0240 (H) FN1: (DNR)
02/05/01 0240 (H) GOVERNOR'S TRANSMITTAL LETTER
03/14/01 (H) RES AT 2:00 PM CAPITOL 124
WITNESS REGISTER
NICO BUS, Administration Services Manager
Central Office
Division of Support Services
Department of Natural Resources (DNR)
400 Willoughby Avenue, 5th Floor
Juneau, Alaska 99801-1724
POSITION STATEMENT: Came before the committee to speak about HB
108.
MARY ANN ROWE, President
Kachemak Bay Title Company
3691 Ben Walters Lane, Number 1
Homer, Alaska 99603
POSITION STATEMENT: Testified via teleconference in support of
HB 108.
SHARON YOUNG, State Recorder
State Recorder's Office
Division of Support Services
Department of Natural Resources (DNR)
550 West 7th Avenue, Suite 1210
Anchorage, Alaska 99501-3564
POSITION STATEMENT: Spoke via teleconference regarding HB 108.
ACTION NARRATIVE
TAPE 01-20, SIDE A
Number 0001
CO-CHAIR DREW SCALZI called the House Resources Standing
Committee meeting to order at 2:20 p.m. Representatives Fate,
McGuire, Green, Stevens, Kerttula, and Scalzi were present at
the call to order. Representative Chenault arrived as the
meeting was in progress.
HB 108-DEPT NATURAL RESOURCES RECORDING FEES
CO-CHAIR SCALZI announced that the first order of business would
be HOUSE BILL NO. 108, "An Act relating to the accounting for
and appropriation of fees for recording and related services by
the Department of Natural Resources; and providing for an
effective date."
Number 0165
NICO BUS, Administration Services Manager, Central Office,
Division of Support Services, Department of Natural Resources
(DNR), explained that HB 108 would not change much of anything
except the title of the revenue collected, which would change
the budget. He mentioned that Sharon Young would be available
to answer questions regarding the program. He stated that
[DNR's] recording office has been collecting revenues in excess
of its operation for a number of years, with a budget of $2.4
million and a collection of over $4 million. Mr. Bus clarified
that [HB 108] would not change any of the fee structures or have
any impact on the projected revenues.
MR. BUS told the House Resources Standing Committee that [DNR]
is asking for a change from general fund program receipts to
receipts of supported services, so that, in terms of the budget,
the program could stand on its own. He pointed out that
although the customers pay for the services, often, when budget
deliberations are done [by DNR] internally, [the State
Recorder's Office] has to compete with other division. Mr. Bus
mentioned being told by the [Office of Management and Budget],
after the passage of HB 418 last year, that the State Recorder's
Office would qualify for "this type of classification."
MR. BUS stated that the House Resources Standing Committee could
get an understanding of why HB 108 was up before them by looking
at the fiscal note. He told the committee that the increase in
the cost of postage on 200,000 documents has an impact on the
budget, adding that it is hard to compete for the general fund
resources. Mr. Bus said HB 108 would isolate the recorder's
office and would identify the receipts collected and compare
them to the expenditures. He mentioned a [House Finance
Committee] subcommittee on DNR that pointed out that there are
expenditures for the recorder's office that are paid for in
other state agencies, such as the Department of Administration,
which pays for most of the office leases. Mr. Bus suggested
[the recorder's office] could start to pick up those types of
costs and show its revenue expenditure more easily [if HB 108
passed], so that the users of the recorder's office could see
that their fees are used appropriately and that the [recorder's
office] would not make a huge profit.
Number 0493
REPRESENTATIVE McGUIRE mentioned an adage about expanding in
order to fill a gap. She asked for confirmation that the
appropriations and collections were $2.4 million and $4 million,
respectively, and suggested that a modest fee reduction could be
incorporated, given the large gap between those two figures.
MR. BUS responded that the fee structure has been studied, but
has not been changed significantly since 1991; he added that the
amount of revenue fluctuates with the volume of transactions
being processed. He said [the recorder's office] fees are very
reasonable compared to those of other states. Mr. Bus noted
that HB 108 would allow [the recorder's] office to show more of
its true cost, adding, "The $2.4 [million] is only for the
amount of money that we are spending in our recorder's office in
the Department of Natural Resources."
MR. BUS reiterated that the Department of Administration spends
about $300,000 to pay for [the recorder's office's] leases. He
cited some examples of other expenses: a lease cost in the
court system and a fee for storing old records at Archives [and
Record Management Services ("Archives")]. He explained that,
currently, [the recorder's office] does not have the money in
its DNR budget to pay those fees, but if the fee could be
changed [through the passage of HB 108], [the recorder's office]
could pay the other agencies and demonstrate that its fees are
reasonable and that they come close to the amount of its
expenditures.
Number 0672
REPRESENTATIVE McGUIRE rephrased her question and asked Mr. Bus
if it is his intent to lower the fee.
MR. BUS answered no. He added that the fees would stay the same
and a yearly report would show how close the revenue comes to
the expenditures.
Number 0704
REPRESENTATIVE STEVENS asked Mr. Bus to give the committee an
idea of what the total cost to DNR would be when fees are
brought in that are "paid by other departments, like the
Department of Administration."
MR. BUS reiterated that DNR's recorder's office budget is $2.4
million. He listed some of the major expenses paid by the
Department of Administration as follows: approximately $320,000
for lease costs, costs for central payroll and central
archiving; and separate mainframe and networks computer costs
totaling $100,000. He added that the total expenditures come to
about $3 million, based solely on the major expenses he is
currently aware of; however, upon closer scrutiny, more costs
could be added to the list.
MR. BUS explained that the recorder's office used to be part of
the court system; therefore there are many old records of deeds
and trusts that are in binders that need to be filmed and sent
to Archives. He added, "Archives charges for [the] cost of
archiving. This is permanent archiving, so we haven't really
been charged for this, but, again, that would kind of show the
customers that the ... revenue's paying for the cost, and it
comes close."
REPRESENTATIVE STEVENS asked Mr. Bus to confirm that the goal
[of the recorder's office] is to get all of the approximately $3
million in legitimate expenses under DNR. He mentioned the
approximately $1 million in excess charges that would not be
used and asked if those funds would end up in the general fund.
MR. BUS answered that those funds go to the unrestricted general
fund and are available for appropriation.
Number 0902
MARY ANN ROWE, President, Kachemak Bay Title Company, testified
via teleconference in support of HB 108. She stated the
importance of microfilming old records that currently remain in
their original form. She said not being able to protect the
records by making copies of them for Archives would have serious
effects in the future on landowners. Ms. Rowe stated her belief
that it would be a good thing for the recorder's office to be
able to utilize its funds/receipts.
Number 0995
REPRESENTATIVE GREEN asked Mr. Bus, if HB 108 were passed with
its fiscal note, whether he would anticipate that the budget
would rise above the $4 million as additional requests were
received.
Number 1055
MR. BUS answered that the workload fluctuates, and currently,
because [the recorder's office] has to compete for the general
fund, it is at a standstill, with no ability to respond to its
workload. The proposed funding would give [the recorder's
office] more freedom to ask for more money to meet the cost of
the workload.
MR. BUS, in response to a previous comment by Representative
Stevens, said, "This excludes our capital request." He
explained that there are 14 offices around the state, and much
of the equipment used in archiving has been handed down from the
court system and is antiquated. He mentioned an idea to provide
a library where people could access records and said that [the
recorder's office] would need [new] equipment to be able to
realize that idea. He said the current capital request is for
about $250,000.
Number 1155
REPRESENTATIVE GREEN asked Mr. Bus, if there were a
"rash" of increases in requests, because of the gas
pipeline, for example, whether [the recorder's office]
would "rise" or fluctuate with those requests.
MR. BUS answered that that was the intent of [the recorder's
office]. He made note of the increased workload related to the
gas pipeline activity, saying that if the prime rate dropped,
people would start refinancing, which would increase the
workload in [the recorder's office]. He stated that he would
like to call on Sharon Young to discuss that issue.
Number 1218
SHARON YOUNG, State Recorder, State Recorder's Office
(Anchorage), Division of Support Services, Department of Natural
Resources (DNR), testified via teleconference to answer
questions. She commented that the workload [in the recorder's
office] is cyclical, and fluctuates for many reasons, including
economic ones. For example, she stated that last month there
was a 10,000-document increase because of the NBA [National Bank
of Alaska]-Wells Fargo transactions being recorded. Ms. Young
said those types of things happen sporadically, and the current
fee structure of [the recorder's office] is such that the
revenues are sufficient to cover all costs. She added that [the
recorder's office] does not anticipate excessive activity as a
result of the gas pipeline; it would be comparable to the oil
pipeline. She said it would affect a number of recording
districts and offices. Ms. Young stated the opinion of [the
recorder's office] that the funding is sufficient to handle
that, and added that with the "ups and downs" in [the recorder's
office] activity, "it would be very nice to have the ability to
work with those [funds] and have a more stable ability to rely
on that."
Number 1331
REPRESENTATIVE FATE asked Mr. Bus what processes he had in place
to ensure the efficiency of the change in accounting centers and
to guarantee that the approximately $1.5 million in excess of
expenditures would not be mixed with other funds within the
department, now that it was out of "the general fund scrutiny."
He specified that he wanted to know how Mr. Bus would be able to
show the legislators involved in "missions and measures" where
that money went. He said if the money were interdepartmental,
it apparently would not "lapse" into the general fund.
Representative Fate stated that [the recorder's office] would
have an excess [of money], and said if it built up over the
years, [the recorder's office] may expect to spend it on things
that are not necessary, or may "be looking at other areas,
within the department of DNR."
Number 1449
MR. BUS responded with the following:
First of all, the appropriation for the recorder's
office is limited by the appropriation that you make.
So, even today, the receipts that we collect are
limited in expenditures by the appropriation we have.
The appropriation for the recorder's office currently
is only $2.4 million dollars. If you choose to
increase that, we would have to come to you, whether
it's called "program receipts" or "receipts for the
services."
The accounting and the auditing - for right now, the
recorder's office [has a] separate budget which
(indisc.) complete, separate appropriation in the
department. And they don't mix with [the Division of]
Oil & Gas and all these other programs, and so there
is, clearly, separate accounting. And we are limited
to the amount that is appropriated. $2.4 million only
funds 11 of our 14 recorder's offices; there are 3 of
our recorder's offices that we are not budgeting for
dealing with, because they are still under the court
system. The court has asked us repeatedly if we are
ready and willing to take it over, and we are. But we
are, again, limited by our budget.
And so ... we have two different branches of
government that are doing the service. ... Getting
back to your issue of missions and measures: it's a
problem for us, because when a customer comes to our
court office where they want to do a recording, and
that court clerk is busy with a court case, then they
just put the recording aside and they don't deal with
it. It might be a couple of days.
And so, what Sharon [Young] would like - and [Ms.
Young] can comment a little more - is that full
control of all the responsibilities in the recording
throughout the state. And right now, we handle the
recording for 11 of the recording offices, and 3 are
dealt with through the court system. And so, it's a
little awkward, and this, again, would be an avenue
where we could say, through the court, "Hey, those 3
offices - let us know what it would take, and then
we'll come back to you and ... we'll present it to you
as a [policymaker], and say, "Are you willing to fund
those through these receipt support services? Do it
in these offices." That's another advantage that's
currently -- we are just absolutely limited. We said,
"The only thing we will do is have the current 11,
because that 2.4 is all we can do."
Number 1603
REPRESENTATIVE FATE asked for clarification regarding the
receipts and the general fund.
MR. BUS replied that the receipts go into the general fund and
then $2.4[million] of that is appropriated.
REPRESENTATIVE FATE inquired whether this change in accounting
would be more efficient.
MR. BUS responded that it would not change anything for the
customer; it would just change the name of the receipt. He
stated that the change would take [the recorder's office]
outside of general fund competition, within the department and
within state government, because it would isolate those receipts
just for the recorder's office. He added, "If you say, 'Now,
recorders, after a year it's only $2.5[million],' if we collect
$4 million, we still give $1.5 million dollars to the treasury."
Number 1661
REPRESENTATIVE KERTTULA clarified that like the fish and game
fund, it's all general fund money and it's up to the legislature
whether or not it gets used and for what purpose. She said
talking about individual funds in it is like putting up an
imaginary picket fence, which can help show within departments
what expenses are and how much money was made.
Number 1699
CO-CHAIR SCALZI commented:
It's [an] excellent idea/concept if we pay attention
to it. If we don't pay attention to it, then what
Representative Kerttula said is absolutely true.
Number 1758
REPRESENTATIVE STEVENS made a motion to move HB 108 out of
committee with individual recommendations and the attached
fiscal note. There being no objection, HB 108 moved from the
House Resources Standing Committee.
[The LIO turned off the recording twice before the actual
adjournment, during which time the committee discussed upcoming
meetings.]
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 2:43 p.m.
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