Legislature(1993 - 1994)
03/16/1993 08:00 AM House STA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE
March 16, 1993
8:00 a.m.
MEMBERS PRESENT
Representative Al Vezey, Chairman
Representative Pete Kott, Vice Chairman
Representative Harley Olberg
Representative Jerry Sanders
Representative Fran Ulmer
Representative Bettye Davis
MEMBERS ABSENT
Representative Gary Davis
OTHER HOUSE MEMBERS PRESENT
Representative Eldon Mulder
COMMITTEE CALENDAR
HB 65 "An Act relating to the improvement of state
finances through reduction of operating costs of
certain state agencies and establishment of
certain fees; and providing for an effective
date."
HELD IN COMMITTEE FOR FURTHER CONSIDERATION
HB 59 "An Act making a special appropriation to the
Department of Natural Resources for refunds to
certain veterans who purchased state land and for
reimbursement to the University of Alaska for the
veterans' land discount applied to land
transferred to the University of Alaska; and
providing for an effective date."
HELD IN COMMITTEE FOR FURTHER CONSIDERATION
WITNESS REGISTER
Howard Joyce, Legislative Aide
to Representative Eldon Mulder
Room 116, State Capitol
Juneau, Alaska 99801-1182
465-2647
Position Statement: Outlined HB 59
Raga Elim, Assistant to
Commissioner Glenn Olds
Department of Natural Resources
400 Willoughby Avenue
Juneau, Alaska 99801-1724
465-2400
Position Statement: Explained HB 59 - related settlement
Representative Eldon Mulder
Room 116, State Capitol
Juneau, Alaska 99801-1182
465-2647
Position Statement: Prime Sponsor, HB 59
Cheryl Frasca
Office of Management and Budget
P.O. Box 110020
Juneau, Alaska 99811-0020
465-4681
Position Statement: Supported HB 65
Donald G. Study, Acting Director
Division of Labor Standards and Safety
Department of Labor
P.O. Box 20630
Juneau, Alaska 99802-0630
465-4855
Position Statement: Supported HB 65
Joe Ryan, Committee Aide
to Representative Al Vezey
Room 102, State Capitol
Juneau, Alaska 99801-1182
465-3719
Position Statement: Provided information on CSHB 65
PREVIOUS ACTION
BILL: HB 65
SHORT TITLE: FINANCIAL ADMINISTRATION OF STATE GOVT.
BILL VERSION:
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
TITLE: "An Act relating to the improvement of state finances
through reduction of operating costs of certain state
agencies and establishment of certain fees and providing for
an effective date."
JRN-DATE JRN-PG ACTION
01/15/93 75 (H) READ THE FIRST TIME/REFERRAL(S)
01/15/93 75 (H) L&C, STATE AFFAIRS, JUDICIARY,
FINANCE
01/15/93 75 (H) -8 FNS(2-DEC, 2-DHSS, LABOR,
DNR, DPS
01/15/93 75 (H) ADM) PUBLISHED 1/15/93
01/15/93 75 (H) -5 REVENUE FNS(DPS, 2-LABOR,
2-DOE)1/15
01/15/93 75 (H) -5 ZERO FNS (3-ADM, LABOR, REV)
1/15/93
01/15/93 75 (H) GOVERNOR'S TRANSMITTAL LETTER
02/01/93 201 (H) -REVISED FN (DNR) 2/1/93
02/08/93 251 (H) -CORRECTED FN (DNR) 2/8/93
02/09/93 (H) L&C AT 03:00 PM CAPITOL 17
02/09/93 (H) MINUTE(L&C)
02/11/93 (H) L&C AT 03:00 PM CAPITOL 17
02/23/93 (H) L&C AT 03:00 PM CAPITOL 17
03/01/93 478 (H) L&C RPT CS(L&C) NEW TITLE 3DP
1NR
03/01/93 478 (H) DP: PORTER, SITTON, GREEN
03/01/93 478 (H) NR: HUDSON
03/01/93 479 (H) -REVENUE FN (DPS) 3/1/93
03/01/93 479 (H) -ZERO FISCAL NOTE (ADM) 3/1/93
03/01/93 479 (H) -7 PREV FNS (2-DEC, 2-DHSS,
LABOR, DPS
03/01/93 479 (H) ADM) 1/15/93 PREV FN (DNR)
2/8/93
03/01/93 479 (H) -5 PREV REV FNS(DPS, 2-LABOR,
2-DOE)1/15
03/01/93 479 (H) -5 PREV ZERO FNS(3-ADM,LABOR,
REV) 1/15/93
03/01/93 479 (H) REFERRED TO STATE AFFAIRS
03/16/93 (H) STA AT 08:00 AM CAPITOL 102
BILL: HB 59
SHORT TITLE: APPROP: VETS' LAND DISCOUNT REFUND
BILL VERSION:
SPONSOR(S): SPECIAL CMTE MILITARY & VETERANS AFFAIRS
TITLE: "An Act making a special appropriation to the
Department of Natural Resources for refunds to certain
veterans who purchased state land and for reimbursement to
the University of Alaska for the veterans' land discount
applied to land transferred to the University of Alaska; and
providing for an effective date."
JRN-DATE JRN-PG ACTION
01/15/93 72 (H) READ THE FIRST TIME/REFERRAL(S)
01/15/93 72 (H) MIL & VET AFF, STATE AFFAIRS,
FINANCE
02/18/93 (H) MLV AT 10:00 AM CAPITOL 17
02/24/93 (H) MLV AT 05:00 PM CAPITOL 17
02/24/93 (H) MINUTE(MLV)
03/01/93 483 (H) MLV RPT CS(MLV) 4DP
03/01/93 483 (H) DP: MULDER, WILLIS, FOSTER,
NAVARRE
03/01/93 484 (H) -ZERO FISCAL NOTE (DNR) 3/1/93
03/01/93 484 (H) REFERRED TO STATE AFFAIRS
03/16/93 (H) STA AT 08:00 AM CAPITOL 102
ACTION NARRATIVE
TAPE 93-29, SIDE A
Number 000
CHAIRMAN AL VEZEY called the House State Affairs Committee
to order at 8:02 a.m. on March 16, 1993. Members present
included Representatives Kott, Olberg, B. Davis, Ulmer and
Sanders, representing a quorum. Representative Eldon Mulder
was also in attendance.
HB 59: APPROP: VETS' LAND DISCOUNT REFUND
Number 021
CHAIRMAN VEZEY read the title to HB 59 and called for a
statement from its sponsor, Representative Eldon Mulder.
Number 037
HOWARD JOYCE, LEGISLATIVE AIDE TO REPRESENTATIVE MULDER,
PRIME SPONSOR OF HB 59, outlined the history of HB 59, from
the initial Veterans Land Discount in 1978, to its being
struck down by the Alaska Supreme Court in 1983 in Gilman v.
Martin, and its eventual resurrection in the Second Session
of the 13th Legislature. He noted the passage of the
enabling legislation for a later version of the veterans'
discount (HB 134 in the 16th Legislature) and the failure of
the needed appropriation bill to pass the Senate in the
Second Session of the 17th Legislature in 1992.
Number 125
CHAIRMAN VEZEY asked how many people would be affected by
HB 59.
Number 127
MR. JOYCE stated 36 veterans would benefit from HB 59's
passage, with an associated cost of $74,000.
CHAIRMAN VEZEY asked why there was an apparent discrepancy
between the $74,000 in the fiscal note and the $126,000 cost
estimate from the Department of Natural Resources (DNR).
Number 175
MR. JOYCE explained the $74,000 was needed in cash to
reimburse veterans who had already paid off the loans on
their land, while another $50,000 had already been credited
to the accounts of veterans still paying on loans.
Number 201
REPRESENTATIVE HARLEY OLBERG asked if any of the figures
presented included land subject to default.
MR. JOYCE said he did not have those figures available, and
went on to explain why some veterans never had discounts
figured into the cost of their land. He stated many had
already paid for their land when HB 134 passed the 16th
Legislature, and subsequently did not get credit due them.
Veterans who still owed money were given credit against the
principal of their debt.
Number 255
REPRESENTATIVE JERRY SANDERS asked why $49,000 of the
appropriation was slated for the University of Alaska.
Number 257
MR. JOYCE stated the University was the rightful owner of
the land sold to the veterans by the DNR.
Number 285
REPRESENTATIVE OLBERG knew of similar circumstances where
land rightfully belonging to the federal government had been
sold to private individuals.
Number 300
CHAIRMAN VEZEY asked if the state had sold land that did not
belong to it.
MR. JOYCE replied in the affirmative.
Number 307
REPRESENTATIVE SANDERS asked if the issues of reimbursing
the veterans and the University should be considered in
separate legislation.
Number 313
MR. JOYCE explained the two issues were tied together
because the veterans received discounts on land rightfully
owned by the University. He then deferred to the DNR
Special Assistant, Raga Elim, for further clarification.
Number 330
RAGA ELIM, SPECIAL ASSISTANT, DNR, explained how the
University became involved in the veterans discount. He
stated the University and the state had agreed to a
dissolution of a land agreement with the municipality of
Anchorage, in which the University gave up rights to
municipal land in exchange for other tracts, the right to
harvest timber on other land, and the administration of a
number of contracts, including the loans for veterans' land,
which entitled the University to expect revenue.
Number 360
REPRESENTATIVE SANDERS felt the University's needs should be
considered separate from the veterans' land refunds.
CHAIRMAN VEZEY stated HB 59's short title might be
misleading, but its full title did include reimbursement of
the University.
Number 380
REPRESENTATIVE OLBERG noted the amounts to be refunded to
the University seemed to be very well rounded off, and
wondered if they represented estimates on the lands' value
when the discounts were allowed. He asked if the University
might still hold title to land that had been defaulted on.
Number 389
MR. ELIM agreed the numbers seemed too well rounded off, but
had no knowledge of how the figures were generated.
Number 391
REPRESENTATIVE OLBERG asked if the University might still
hold title to defaulted land.
Number 393
MR. ELIM stated it was a possibility.
Number 405
REPRESENTATIVE OLBERG stated it seemed some vets may have
never paid anything on their property.
Number 407
CHAIRMAN VEZEY asked what the "U" designations on some cells
of a spreadsheet presented to the committee stood for. He
stated it was hard to tell if any land was in default.
Number 422
REPRESENTATIVE SANDERS was not in favor of moving HB 59
until the relationship between the University and the DNR,
and the breakdown of defaulted properties was better
explained.
Number 430
REPRESENTATIVE OLBERG said unless the University could show
it sustained an out-of-pocket loss, he would not support
moving HB 59.
Number 437
CHAIRMAN VEZEY asked about the settlement between the DNR
and the University.
MR. ELIM restated the deal struck by the University and the
state involving the land rights, timber cutting and
contracts. He said the reason the DNR supported HB 59 was
because the DNR did not have the funds to reimburse the
veterans themselves. He restated the history behind
legislative efforts to refund the veterans.
Number 469
CHAIRMAN VEZEY understood the chain of events to be
university ownership of the contracts on the lands, which
were then bought by veterans who in some cases defaulted on
the loans, with the University finally owning the land.
Number 472
REPRESENTATIVE OLBERG understood the transaction to be that
the University owned the paper on the land at a purported
value, the buyer-veteran was given a discount on the land,
and the University took the loss in the event of a default.
Number 478
MR. ELIM did not know if the University reserved the right
to foreclose on individual owners, but felt in any case the
University had a right to expect revenue from the deals.
Number 499
REPRESENTATIVE OLBERG stated if the veterans defaulted on
loans after making some payments to the University, then the
numbers presented on the supplied spreadsheet may not be
what the University was actually owed.
Number 515
CHAIRMAN VEZEY stated five legislatures had looked at the
problem and had not taken action, and asked why more than
ten years had passed before someone had taken action. He
also noted the arrival of Representative Ulmer.
Number 520
REPRESENTATIVE OLBERG stated the 16th Legislature had put
the process in motion as a "nice idea", but left the dirty
work of funding it up to the successive legislatures, such
as the 18th.
Number 531
CHAIRMAN VEZEY stated non-general fund money would be needed
to cover the appropriation under HB 59, and asked if anyone
knew of any such money being available.
Number 540
MR. ELIM did not know where the money would come from and
explained the DNR did not have the money to refund the
veterans, which was why the DNR came forward with HB 59.
Number 560
REPRESENTATIVE FRAN ULMER noted the history of previous
bills like HB 59. She felt it was not a matter of whether
the money was owed, bur rather of how much, and asked how
confident the DNR was of its numbers.
Number 569
MR. ELIM stated the DNR's Division of Land prepared the
numbers for Representative Mulder, and the DNR's figures
were accurate according to the contracts. He stated further
that the veterans involved also knew of the amounts, which
would serve as a check.
Number 597
REPRESENTATIVE ULMER MOVED passage of HB 59. On roll call,
HB 59 FAILED to pass on a 3-3 vote; Representatives Kott,
Ulmer and Davis voted yes; Representatives Vezey, Olberg and
Sanders voted no.
Number 605
CHAIRMAN VEZEY noted the failure of HB 59, and invited its
sponsor, Representative Eldon Mulder to comment.
Number 617
REPRESENTATIVE ELDON MULDER, PRIME SPONSOR OF HB 59, stated
the House Special Committee on Military and Veterans Affairs
introduced the bill for two reasons: 1) because it was not
fair to introduce legislation that enabled veterans to
receive a refund, as was done in the 16th Legislature,
without paying off; and 2) because the state was sure to
lose any lawsuit veterans might file, which could cost the
state more than the amount owed. He stated he would provide
the committee any information it needed, including the
number of tracts taken into defaults.
Number 635
REPRESENTATIVE OLBERG stated he might prefer repealing the
enabling legislation if not for a potential lawsuit.
Number 647
REPRESENTATIVE SANDERS stated if the bill were broken into
two parts, he might not have a problem, but could not
support HB 59 at this time.
Number 650
CHAIRMAN VEZEY noted the time of 8:45 a.m. and placed the
committee at ease.
HB 65: FINANCIAL ADMINISTRATION OF STATE GOVT.
TAPE 93-29, SIDE B
Number 010
CHAIRMAN VEZEY called the committee back to order at 8:56
a.m. and read the title to CSHB 65. He stated his intention
to go through the bill section by section with the
committee, and began with sections one to 32, which dealt
with the liquor industry.
Number 050
CHERYL FRASCA, DIVISION DIRECTOR, DIVISION OF BUDGET REVIEW,
OFFICE OF MANAGEMENT AND BUDGET (OMB), explained the OMB's
role as the facilitator of the Governor's original version
of CSHB 65. She stated the bill was designed to save money
by making most licenses biennial, which would cut down on
the bureaucracy, and also to allow several departments the
right to set fees for licenses, inspections, and
certificates.
Number 067
CHAIRMAN VEZEY noted the omission of a termination date for
late applications for liquor licenses in Section 58,
paragraph c, line 15, and asked if that was an oversight.
Number 091
MS. FRASCA stated she did not know but would confer with the
Department of Law. She stated the law was only for
transition from the old statues to new.
Number 108
CHAIRMAN VEZEY stated CSHB 65, as written, seemed to modify
AS 4.11.270, and asked Ms. Frasca to inquire about the
omission.
Number 150
MS. FRASCA agreed to comply and stated she was at the
committee's disposal to answer questions.
Number 170
CHAIRMAN VEZEY asked committee members to look CSHB 65 over
to see what questions they might have pertaining to sections
one to 32. There were none.
Number 178
CHAIRMAN VEZEY directed the committee's attention to
sections 32 through 36, dealing with the public guardian
statutes in Title 13. He had no questions, but considered
it a major change in the law.
Number 190
MS. FRASCA explained the Office of Public Advocacy (OPA) is
currently part of the Department of Administration, and
CSHB 65's changes would allow the OPA to charge for guardian
services on the basis of ability to pay.
CHAIRMAN VEZEY noted CSHB 65 also gave the OPA the right to
appoint public guardians, currently a court duty.
Number 216
MS. FRASCA said the authority to provide public guardians
came through the court, but OPA had already undertaken the
duties. She stated the repealed sections only dealt with the
allocation of costs of a public guardian, not the authority
of who assigned them.
Number 240
CHAIRMAN VEZEY directed the committee to sections 36 through
43, which dealt with student loan guarantees. He stated the
sections generally created a loan guarantee fee as part of
the cost for a student loan.
Number 259
REPRESENTATIVE ULMER asked why such a fee might be needed
since current figures showed collections were up, and
defaults down.
Number 276
MS. FRASCA explained about $900,000 dollars from student
loans had to be written off in 1992 due to death, bankruptcy
or disability, and the fees would be used to cover those
losses. She estimated the fee would provide about $513,000
per year against such losses.
Number 290
CHAIRMAN VEZEY announced an upcoming committee substitute he
planned to submit would delete increases in the student loan
fee. He then directed the committee to section 44, which
addressed the Department of Labor, giving the Department
authority to set fees for examinations and administering
applications for professional inspectors. He noted the
upcoming committee substitute would also delete the fees.
Number 321
REPRESENTATIVE ULMER asked why the fees would be eliminated.
Number 323
CHAIRMAN VEZEY said allowing such fees by regulation fell
into the area of giving the Department regulatory powers.
Number 326
REPRESENTATIVE ULMER contended charging for inspections
would not be regulatory.
CHAIRMAN VEZEY disagreed, saying the ability to write
regulations on fees would be regulatory.
Number 330
REPRESENTATIVE ULMER asked what kind of fee generation the
Department might see, and what would happen if the
Department was not allowed to impose such fees.
MS. FRASCA stated the fee was $400 to administer boiler
pressure vessel exams, as opposed to no charge currently.
She stated further that the OMB currently charged for most
professional groups, and that institution of this charge
would bring them in line with other professions.
Number 335
REPRESENTATIVE ULMER asked if there was any justification
for not charging the fee.
MS. FRASCA said she had no idea.
Number 337
DONALD G. STUDY, ACTING DIRECTOR, DIVISION OF LABOR
STANDARDS AND SAFETY, DEPARTMENT OF LABOR, said the
Department's budget had been cut over the last three years,
and wished to fund the system with program receipts.
Number 340
CHAIRMAN VEZEY noted the changes in CSHB 65 meant changing
fees by regulation as opposed to changing fees by statute,
and the legislature had no oversight powers to repeal
regulations unless a proposed constitutional amendment was
passed.
Number 350
MR. STUDY stated those regulations underwent legislative
review.
Number 353
CHAIRMAN VEZEY stated the legislature could review such
regulations, but had no oversight powers.
Number 360
REPRESENTATIVE BETTYE DAVIS asked why the Department wanted
to go from statutory to regulatory changes on fees.
Number 363
MR. STUDY stated it was to reflect true costs of licenses,
regulations and inspections.
Number 367
REPRESENTATIVE B. DAVIS asked if that was not the case now.
Number 370
MR. STUDY explained that was not the case in several
instances, and the allowance of fees by regulation would
also eliminate peaks and valleys in program receipts, and
stabilize the revenues from them.
Number 388
MS. FRASCA stated CSHB 65 reflected the frustration of
having to pass rate increases through statues, which she
said was inefficient. She said CSHB 65 cleared the way to
update fees easily.
Number 402
JOE RYAN, COMMITTEE AIDE TO CHAIRMAN VEZEY, noted CSHB 65
allowed a broadening of scope for license fees to be
regulated, and gave an example of a fee structure under the
Department which would increase the professional fees almost
immediately.
REPRESENTATIVE ULMER stated the debate was more about
philosophy than setting fees, and stated supporting user
fees made sense. She also stated those who used a service
and benefitted should pay.
Number 420
CHAIRMAN VEZEY stated the debate was not about user fees,
but rather who got to set them: The people running the
department or the legislature. He then directed the
committee to read through section 53, and called for
comments on the catastrophic reserve account. Seeing none,
he stated the upcoming committee substitute he planned would
eliminate the provisions for the account. He then directed
members to the section allowing the DNR to set user fees for
state parks, and announced his committee substitute would
also delete this reference.
Number 462
REPRESENTATIVE ULMER stated Alaska's parks were used by far
more people than those in the Lower 48, and not allowing the
DNR to charge users for their services would lead to a
deterioration of the parks. She stated removing such
authority was a mistake.
Number 466
CHAIRMAN VEZEY stated he did not intend to remove the
authority to charge fees, but rather to prevent them from
being set by regulation.
Number 480
REPRESENTATIVE ULMER stated it was impractical for the
legislature to address fees every year for every department,
and by forcing them to do so would cause the parks to
deteriorate, since legislators might put off such increases.
Number 485
CHAIRMAN VEZEY reiterated the status of a constitutional
amendment to allow regulations to be repealed by the
legislature, and stated that must be passed before allowing
departments to set such fees. He then directed the
committee to section 54, which allowed the Department of
Environmental Conservation (DEC) to set regulatory fees, and
also gave the DEC broader powers. He stated the upcoming
committee substitute would delete this section.
CHAIRMAN VEZEY also noted section 55 dealt with air quality,
and stated consideration of this section would be
inappropriate until the legislature's study of air quality
was completed. He then noted sections 56 through 58 were
housekeeping measures, which generated no comment from
members.
Number 537
MS. FRASCA noted the sections simply provided a regulatory
bridge between the old statutes and the new.
ADJOURNMENT
Number 556
CHAIRMAN VEZEY then introduced the House State Affairs CS to
CSHB 65, and seeing no comment or testimony, adjourned the
meeting at 9:31 a.m.
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