Legislature(1995 - 1996)
04/27/1995 08:42 AM House STA
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE
April 27, 1995
8:42 a.m.
MEMBERS PRESENT
Representative Jeannette James, Chair
Representative Scott Ogan, Vice Chair
Representative Ed Willis
Representative Caren Robinson
Representative Ivan Ivan
Representative Joe Green
Representative Brian Porter
MEMBERS ABSENT
None
COMMITTEE CALENDAR
HB 224: "An Act relating to the state plumbing code."
PASSED OUT OF COMMITTEE
HB 210: "An Act relating to issuance of motor vehicle
registrations and titles, and to licenses and
permits to operate a motor vehicle."
PASSED OUT OF COMMITTEE
HB 270: "An Act relating to retirement incentive programs
for the public employees' retirement system and the
teachers' retirement system; relating to separation
incentives for certain state employees; and
providing for an effective date."
PASSED OUT OF COMMITTEE
HB 241: "An Act relating to the use of a candidate's
campaign account."
HEARD AND HELD
*HJR 2: Proposing amendments to the Constitution of the
State of Alaska relating to redistricting and to
the length of a regular session, and establishing
a unicameral legislature; and providing for an
effective date for each amendment.
SCHEDULED BUT NOT HEARD
CSSB 80(FIN): "An Act relating to police protection service areas
in certain unified municipalities; and to police
protection provided by the state in certain
municipal areas."
SCHEDULED BUT NOT HEARD
*HB 304: "An Act relating to geographic differentials for
the salaries of certain state employees who are not
members of a collective bargaining unit; relating
to periodic salary surveys and preparation of an
annual pay schedule regarding certain state
employees; relating to certain state aid
calculations based on geographic differentials for
state employee salaries; and providing for an
effective date."
SCHEDULED BUT NOT HEARD
(* First public hearing)
WITNESS REGISTER
REPRESENTATIVE VIC KOHRING
Alaska State Legislature
State Capitol, Room 428
Juneau, Alaska 99801
Telephone: 465-2186
POSITION STATEMENT: Sponsor of HB 224
REPRESENTATIVE AL VEZEY
Alaska State Legislature
State Capitol, Room 216
Juneau, Alaska 99801
Telephone: 465-3719
POSITION STATEMENT: Sponsor of HB 210
JUANITA HENSLEY, Chief of Driver Services
Division of Motor Vehicles
Department of Public Safety
P.O. Box 20020
Juneau, Alaska 99811-0020
Telephone: 465-4361
POSITION STATEMENT: Supports HB 210
MARGOT O. KNUTH, Assistant Attorney General
Criminal Division
Department of Law
P.O. Box 110300
Juneau, Alaska 99811-300
Telephone: 465-3428
POSITION STATEMENT: Supports HB 210
BOB STALNAKER, Director
Division of Retirement and Benefits
Department of Administration
P.O. Box 110203
Juneau, Alaska 99811
Telephone: 465-4460
POSITION STATEMENT: Supports HB 270
MARK R. LIVINGSTON
832 Warren Street
Ketchikan, Alaska 99901
Telephone: 247-0166
POSITION STATEMENT: Supports HB 270
REPRESENTATIVE CON BUNDE
Alaska State Legislature
State Capitol, Room 108
Juneau, Alaska 99801
Telephone: 465-4843
POSITION STATEMENT: Sponsor of HB 241
BROOKE MILES, Juneau Branch Administrator
Alaska Public Offices Commission
240 Main Street, Room 201
Juneau, Alaska 99801
Telephone: (907) 465-4864
POSITION STATEMENT: Testified on HB 241
PREVIOUS ACTION
BILL: HB 224
SHORT TITLE: STATE PLUMBING CODE
SPONSOR(S): REPRESENTATIVE(S) KOHRING,Green
JRN-DATE JRN-PG ACTION
03/03/95 564 (H) READ THE FIRST TIME - REFERRAL(S)
03/03/95 564 (H) LABOR & COMMERCE
03/22/95 (H) L&C AT 03:00 PM CAPITOL 17
03/22/95 (H) MINUTE(L&C)
03/27/95 (H) L&C AT 05:15 PM CAPITOL 17
03/27/95 (H) MINUTE(L&C)
03/29/95 (H) L&C AT 03:00 PM CAPITOL 17
03/29/95 (H) MINUTE(L&C)
04/10/95 (H) L&C AT 03:00 PM CAPITOL 17
04/10/95 (H) MINUTE(L&C)
04/12/95 1281 (H) L&C RPT CS(L&C) 2DP 4NR
04/12/95 1281 (H) DP: KOTT, ROKEBERG
04/12/95 1281 (H) NR: MASEK,KUBINA,ELTON,SANDERS
04/12/95 1281 (H) ZERO FISCAL NOTE (LABOR)
04/13/95 1327 (H) STA REFERRAL ADDED
04/20/95 (H) STA AT 08:00 AM CAPITOL 102
04/20/95 (H) MINUTE(STA)
04/25/95 (H) STA AT 08:00 AM CAPITOL 102
04/25/95 (H) MINUTE(STA)
04/27/95 (H) STA AT 08:00 AM CAPITOL 102
BILL: HB 210
SHORT TITLE: PRIVATE MOTOR VEHICLE LICENSING/TESTING
SPONSOR(S): REPRESENTATIVE(S) VEZEY
JRN-DATE JRN-PG ACTION
03/01/95 529 (H) READ THE FIRST TIME - REFERRAL(S)
03/01/95 529 (H) TRANSPORTATION, STATE AFFAIRS
03/17/95 (H) TRA AT 01:00 PM CAPITOL 17
03/20/95 (H) TRA AT 01:00 PM CAPITOL 17
03/20/95 (H) MINUTE(TRA)
04/19/95 (H) TRA AT 01:00 PM CAPITOL 17
04/21/95 (H) TRA AT 01:00 PM CAPITOL 17
04/21/95 (H) MINUTE(TRA)
04/22/95 1445 (H) TRA RPT CS(TRA) 1DP 3NR 1AM
04/22/95 1445 (H) DP: JAMES
04/22/95 1445 (H) NR: MACLEAN, BRICE, WILLIAMS
04/22/95 1445 (H) AM: G.DAVIS
04/22/95 1446 (H) ZERO FISCAL NOTE (DPS)
04/25/95 (H) STA AT 08:00 AM CAPITOL 102
04/25/95 (H) MINUTE(STA)
04/27/95 (H) STA AT 08:00 AM CAPITOL 102
BILL: HB 270
SHORT TITLE: RETIREMENT INCENTIVE PROGRAM
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
JRN-DATE JRN-PG ACTION
03/20/95 813 (H) READ THE FIRST TIME - REFERRAL(S)
03/20/95 814 (H) STA, L&C, FINANCE
03/20/95 814 (H) 2 FISCAL NOTES (ADM)
03/20/95 814 (H) INDETERMINATE FN (GOV/ALL DEPTS)
03/20/95 814 (H) GOVERNOR'S TRANSMITTAL LETTER
03/30/95 (H) STA AT 08:00 AM CAPITOL 102
04/01/95 (H) STA AT 10:00 AM CAPITOL 102
04/01/95 (H) MINUTE(STA)
04/04/95 (H) STA AT 03:00 PM CAPITOL 120
04/20/95 (H) STA AT 08:00 AM CAPITOL 102
04/20/95 (H) MINUTE(STA)
04/25/95 (H) STA AT 08:00 AM CAPITOL 102
04/25/95 (H) MINUTE(STA)
04/27/95 (H) STA AT 08:00 AM CAPITOL 102
BILL: HB 241
SHORT TITLE: NO PERSONAL USE OF CAMPAIGN ACCOUNT
SPONSOR(S): REPRESENTATIVE(S) BUNDE,Rokeberg
JRN-DATE JRN-PG ACTION
03/08/95 642 (H) READ THE FIRST TIME - REFERRAL(S)
03/08/95 642 (H) STATE AFFAIRS, FINANCE
03/10/95 713 (H) COSPONSOR(S): ROKEBERG
04/06/95 (H) STA AT 08:00 AM CAPITOL 102
04/06/95 (H) MINUTE(STA)
04/11/95 (H) STA AT 08:00 AM CAPITOL 102
04/11/95 (H) MINUTE(STA)
04/27/95 (H) STA AT 08:00 AM CAPITOL 102
BILL: HJR 2
SHORT TITLE: UNICAMERAL LEGISLATURE/SESSION LIMIT
SPONSOR(S): REPRESENTATIVE(S) GREEN,Navarre
JRN-DATE JRN-PG ACTION
01/06/95 16 (H) PREFILE RELEASED
01/16/95 16 (H) READ THE FIRST TIME - REFERRAL(S)
01/16/95 16 (H) STA, JUD, FIN
04/27/95 (H) STA AT 08:00 AM CAPITOL 102
BILL: SB 80
SHORT TITLE: MUNICIPAL POLICE SERVICES
SPONSOR(S): SENATOR(S) RIEGER
JRN-DATE JRN-PG ACTION
02/09/95 222 (S) READ THE FIRST TIME - REFERRAL(S)
02/09/95 222 (S) STA, FIN
03/02/95 (S) STA AT 03:30 PM BELTZ ROOM 211
03/02/95 (S) MINUTE(STA)
03/03/95 468 (S) STA RPT 1DP 4NR
03/03/95 468 (S) ZERO FISCAL NOTE (DPS #1)
03/27/95 (S) FIN AT 09:00 AM SENATE FINANCE 532
03/28/95 (S) MINUTE(FIN)
03/30/95 840 (S) FIN RPT CS 2DP 4NR 1AM SAME TITLE
03/30/95 840 (S) PREVIOUS ZERO FN (DPS)
04/10/95 956 (S) RULES TO CALENDAR 4/10/95
04/10/95 960 (S) READ THE SECOND TIME
04/10/95 960 (S) FIN CS ADOPTED UNAN CONSENT
04/10/95 960 (S) ADVANCED TO THIRD READING UNAN
CONSENT
04/10/95 960 (S) READ THE THIRD TIME CSSB 80(FIN)
04/10/95 960 (S) PASSED Y15 N5
04/10/95 960 (S) KELLY NOTICE OF RECONSIDERATION
03/30/95 (S) MINUTE(FIN)
04/10/95 (S) RLS AT 08:30 AM FAHRENKAMP ROOM 211
04/10/95 (S) MINUTE(RLS)
04/11/95 980 (S) RECON TAKEN UP - IN THIRD READING
04/11/95 980 (S) LETTER OF INTENT OFFERED BY HOFFMAN
04/11/95 980 (S) AM 1 TO LETTER OF INTENT ADPTD
UNAN CON
04/11/95 980 (S) (S) ADOPTED LETTER OF INTENT AS
AMENDED
04/11/95 981 (S) PASSED ON RECONSIDERATION
Y14 N5 E1
04/11/95 984 (S) TRANSMITTED TO (H)
04/12/95 1277 (H) READ THE FIRST TIME - REFERRAL(S)
04/12/95 1277 (H) STATE AFFAIRS, FINANCE
04/27/95 (H) STA AT 08:00 AM CAPITOL 102
BILL: HB 304
SHORT TITLE: GEOGRAPHIC PAY DIFFERENTIALS
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
JRN-DATE JRN-PG ACTION
04/07/95 1174 (H) READ THE FIRST TIME - REFERRAL(S)
04/07/95 1174 (H) STA, L&C, FINANCE
04/07/95 1174 (H) GOVERNOR'S TRANSMITTAL LETTER
04/07/95 1174 (H) 2 FISCAL NOTES (ADM, GOV-ALL DEPT)
04/20/95 (H) STA AT 08:00 AM CAPITOL 102
04/20/95 (H) MINUTE(STA)
04/25/95 (H) STA AT 08:00 AM CAPITOL 102
04/25/95 (H) MINUTE(STA)
04/27/95 (H) STA AT 08:00 AM CAPITOL 102
ACTION NARRATIVE
TAPE 95-54, SIDE A
Number 000
The meeting of the House State Affairs Standing Committee was
called to order at 8:42 a.m. Members present at the call to order
were Representatives James, Porter, Green, Ivan, Robinson, Willis,
and Ogan.
HB 224 - STATE PLUMBING CODE
CHAIR JEANNETTE JAMES stated the first bill on the agenda was HB
224. She said she had negotiated with bill sponsor, Representative
Vic Kohring, and the Department of Labor and had drafted a proposed
committee substitute for HB 224, version D.
Number 012
REPRESENTATIVE BRIAN PORTER moved the committee adopt as the
working draft, CSHB 224, version D, dated 4-26-95.
CHAIR JAMES asked if there were any objections.
REPRESENTATIVE VIC KOHRING, bill sponsor, stated this committee
substitute was supported by the Department of Labor.
CHAIR JAMES asked if there were any objections to passing the
proposed committee substitute out of committee.
REPRESENTATIVE SCOTT OGAN said he would object for the sake of
discussion. He asked what the changes were that were incorporated
into the committee substitute.
Number 033
CHAIR JAMES explained the changes were based on the Labor and
Commerce Committee version of HB 224. The new language is on page
3, lines 11-15, which states the requirements to allow for the use
of a single wall heat exchanger. She stated this was a simple
solution and a compromise between all parties involved. She asked
if the objection to passing this committee substitute out of
committee was still maintained.
REPRESENTATIVE OGAN said it was not.
CHAIR JAMES stated the proposed committee substitute was the
working draft before the committee for consideration. She asked if
there was any further discussion on the CSHB 224.
Number 056
REPRESENTATIVE IVAN IVAN moved to adopt CSHB 224, version D, and
pass it out of committee with individual recommendations and
attached fiscal notes.
CHAIR JAMES asked if there were any objections. Hearing none, the
bill passed out of committee. She announced that the next bill on
the agenda was HB 210 by Representative Vezey.
HB 210 - PRIVATE MOTOR VEHICLE LICENSING/TESTING
REPRESENTATIVE AL VEZEY, Sponsor of HB 210, said that HB 210 is a
comprehensive bill on which there has been some considerable
research. He stated this bill has seen a considerable amount of
effort and attention from the legislature and the Administration.
He commented they were trying to create an opportunity to privatize
a government service. Approximately 27 other states provide for
some form of contracting out of motor vehicle services. This bill
is modeled after the statutes and procedures of several of these
states. He added this bill does not mandate anything, but states
the department may. Because there is no mandate, the Division of
Motor Vehicles (DMV) has given this bill a zero fiscal note. It
does lay out a program where the state can contract with parties
to: 1) Register vehicles and issue vehicle titles; 2) issue
drivers licenses; 3) issue commercial drivers licenses; or 4) any
combination of the above. The intent of the sponsor is that the
cost of this program would be born by the savings in administrative
cost and may even see a positive cash flow. The contractors will
not receive any subsidy from the state. They will not receive any
portion of the fees collected for the state, but do have the right
to charge a service fee. He stated this was not that different
than the current process. When an individual purchases a new
automobile, they do not give them the manufacturers statement of
origin. Rather, the individual is charged $35 to go to the DMV and
get a registration and title. He did not expect the service fee
would be as high as $35, but stated they did not put a cap on how
much could be charged. He added the state was not providing any
equipment or staff for the contractor to use. He did not expect
this program to take off immediately, but did suspect there would
be a couple of contract stations by the end of the year, that at a
minimum would provide vehicle registration and titling service. He
mentioned there was already at least one professional driving
school in Alaska. He felt it would be a small step for them to
advance to issuing drivers licenses. Currently, the DMV does not
know what it will take to qualify contractors for these functions,
as they do not compartmentalize the functions of their personnel.
He reiterated they were not requiring the contractor to be
qualified to accomplish all of the DMVs function, as they might
only contract to do a part of the process. He thought there were
only two areas of concern for the DMV: 1) They put the wording of
the contract into statute. This was because they had modelled this
legislation on the model of other states, where this is working and
there is a track record. Also, he felt this was a new enough idea,
that he wanted the Administration to have to work with the
legislature and not just address these contracts by regulation. He
wanted to encourage the DMV to come back to the legislature in a
year or two, and see where there were problems that needed to be
addressed and improved upon. He clarified that this bill did allow
the department to write regulations; and 2) the DMV was used to
adjudicating disputes through an administrative hearing process.
He has tried to approach this bill as a contract between two
parties, as a commercial relationship. Thus, they have set up that
disputes will be handled through Alaskas Uniform Arbitration
Statute, Title 09.42. He advocated this process, as this was a
commercial relationship. The standard in the world of commerce was
to have contracts to provide for arbitration. Additionally,
arbitration is considered to be a faster process than litigation.
There are very few appeals, as the courts recognized the rulings of
arbitration tribunals and do not like to overturn these decisions.
Under the administrative hearing process, one side frequently feels
that they did not receive a fair hearing and appeal to the courts.
The state has to pay the cost of the trial. In arbitration, both
parties split the cost equally at the beginning. After the
process, the arbitrator awards all costs to the prevailing party.
Thus, if the state is the prevailing party, they will not have to
pay anything to settle a dispute. He felt this was an incentive to
find solutions. He argued that arbitration encourages every other
form of dispute resolution, including mediation. He advocated that
they were taking a new approach to how the state does business, and
perhaps this approach should offer a new way of how the state
settles disputes. He commented this was a complex bill, and stated
they started out looking at how the Federal Aviation Administration
handles licensing of pilots and aircraft, which is completely
accomplished in the private sector. This research showed there
were at least 27 states that contract out these services, of which
about 19 contract with the private sector. He offered to answer
any questions.
CHAIR JAMES noticed that Juanita Hensley, representing the DMV, was
present and asked if the committee wanted to hear her testimony
before asking questions of both her and the sponsor.
Number 263
JUANITA HENSLEY, Chief of Driver Services, Division of Motor
Vehicles, stated she had just arrived and apologized for missing
the comments of the bill sponsor. She said the department had
worked with the sponsor to develop a draft of the legislation that
they thought would accommodate their needs. She reiterated one
area of concern was with the contracts being included in the
statute. She felt that should there be a change in the future, this
would require the department to come to the legislature annually to
upgrade the contracts. She added the Department of Law thought the
exact wording of the contract did not need to be in statute, but
just the intent of the legislature. The other area of concern to
the department was the requirement of arbitration. They feared
that if there was a dispute between the contractor and the
department, then they would have to go to arbitration. They felt
this should be accomplished by administrative hearing, emphasizing
this hearing would not be under the guidelines of the
Administrative Procedures Act. Overall, the department felt they
could work with this bill, mentioning they currently had 13
commissioned agents working with them. These agents were small
governmental entities. This was not a new process for the DMV, but
this bill does give them guidelines of how to accomplish this task.
She offered to answer any questions.
Number 325
REPRESENTATIVE CAREN ROBINSON asked if the department was already
privatizing aspects of its service, why it was necessary to have
this legislation.
REPRESENTATIVE VEZEY stated that currently the state was making no
effort to privatize any of its functions. He recognized that there
was some effort towards contracting with local government and other
governmental entities. He said they were directing this effort,
while allowing for considerable flexibility by saying may and not
shall. These services are not currently in the private sector
and they can be. He said that was the difference.
CHAIR JAMES commented if there was anything that could be done to
stop the long lines at the DMV, then it should be considered. She
thought this may accomplish that goal.
Number 349
REPRESENTATIVE JOE GREEN verified that Ms. Hensley had said that
the DMV already had the authority to do this without legislation.
He asked her if she thought this would encourage contracting with
the private sector or mean a continuation of the existing system.
MS. HENSLEY replied this bill would allow the agent to charge a
fee. She thought this may or may not prevent the long lines at the
DMV. Under their existing contracts, they pay the contract agents
15 percent of the intake of profits to process the work for the
DMV. This bill would require a renegotiation of these contracts,
because this bill requires them to collect a fee and then remit the
full fees back to the state. She suspected that if there was a DMV
office in the town an individual was residing in and they could go
there and not pay the additional fee, then they would choose to do
so. Should they favor the shorter lines at the contract station,
then they could choose that option. She cited examples of IM
(Inspection/Maintenance) stations in the Anchorage area, that are
renewing registrations. She stated they had paid for the equipment
and training necessary to set up. This is what they would hope to
see happen should this bill become law: If they are going to offer
the service, that it not place any more burden on the state. The
department does feel that if there are more contractors, they may
need to ask the legislature for additional funding to pay for the
oversight of them. They want to try to continue to provide the
public with the service it is used to receiving, and so would not
foresee reducing the DMV employees under this bill.
Number 426
REPRESENTATIVE GREEN asked if there could not be a flexibility in
the fee structure to allow the contract agent to charge their fee
in addition to those funds that would normally go to the state;
thus making this effectively revenue neutral to the state. He
recognized Ms. Hensleys concern about the need for additional
oversight of the contract agents, but asked if any additional costs
as a result of this would not be made up by a reduction in the
administrative processing work of the DMV.
MS. HENSLEY thought this could be possible, but said the goal of
the department was to reduce those long lines and still provide the
same level of service. To do this, they would still need to keep
the same number of employees.
Number 452
REPRESENTATIVE VEZEY stated one of the problems that arose in
discussing this bill with the DMV was the rather complex system of
checking information when processing vehicle registration, titles,
and drivers licenses. It may be that this process is the
bottleneck that may be preventing the department from providing
better service. He thought it may be necessary to revisit this
legislation in the future to find that balance between control
versus services. The problem in working with this legislation has
been to allow for this control to remain in place, while allowing
for an expansion of service.
REPRESENTATIVE ED WILLIS asked if this bill would put another layer
between the citizens and their elected officials. He asked how the
legislature could address problems that may arise with the contract
agents.
REPRESENTATIVE VEZEY replied that this would only happen if the
citizen voluntarily chose this option. He reminded the committee
that this was the way that pilot licenses were handled, as well as
fishing and hunting licenses. Thus, he did not think this idea was
unusual. He stated he felt it was likely that an individual would
have to pay a premium to go to a private vendor and avoid the long
lines at the local DMV office.
CHAIR JAMES commented this might open options for service that
would be available on a schedule other than 8 a.m. to 5 p.m. She
pointed out that the DMV office in Fairbanks was closed during the
noon hour. She said if you were in line at this time, you faced
the risk of having to come back, claiming she had personally had
this happen in the past.
Number 515
MS. HENSLEY said she was surprised to hear this, because the only
offices that are closed between 12 p.m. and 1 p.m. are the one-
person offices. She also pointed out that they did have offices in
the Anchorage area that were open Tuesday through Saturday to try
to accommodate the needs of the public. She reiterated the DMV was
trying hard to find ways to be more efficient and responsive.
CHAIR JAMES stated that what was distressing to her and the public
was that the DMV is the department that brings in more money than
it spends, yet the service seems to be less than what it should be
for the money received.
MS. HENSLEY replied that the budget of the DMV is only one-fourth
of that which it earns in income.
REPRESENTATIVE VEZEY stated he felt that the initial demand for
these contract agents would come from commercial users, who look
not only at the cost of fees, but also the cost of payroll for the
individual standing in line at the DMV. This could be a way for
them to improve the efficiency of their own internal organization
by tying in with a contract agent of the DMV.
Number 539
MARGOT KNUTH, Assistant Attorney General, Criminal Division,
Department of Law, was concerned that HB 210 in the new proposed
statute, 28.12.120, specifies the required contract language to be
used by the DMV. She said as a general rule, when you specify the
language of a contract in a statute, then you cannot change the
contract without amending the statute. Thus, the preferred
practice is to establish the terms of the contract in statute, but
not the exact language. This provides flexibility should something
be overlooked or another statute changes that has an impact on this
one. She thought this would seriously tie the hands of the
Administration, who would be required to come back to the
legislature to effect any changes in the contracts. Thus, her
recommendation was that this statute not specify the language of
the contracts, but the terms the legislature feels are necessary to
have included in these contracts.
REPRESENTATIVE VEZEY answered that the contracts that they have put
together, state that they will comply with state and federal law
and regulations. He stated they wanted the Administration to have
a reason to come back to the legislature, should there be a problem
that needs to be addressed. He was concerned that should they turn
all authority over to the Administration, then they will be in the
same problems expressed about regulations, which are that neither
the legislature or the Administration is accountable. By putting
the contracts in statute, they hope to encourage the
Administration, legislature, and public to get together in the
event a problem arises.
REPRESENTATIVE ROBINSON asked if there would not have to be
additional regulations drafted even with this tight contract.
Number 579
REPRESENTATIVE VEZEY replied that he felt this statute was very
complete. He stated the DMV had testified in the Transportation
Committee that they did not see that regulations would be required,
as the bill is very complete. They had asked for the authority to
write regulations, should something come up in the future.
REPRESENTATIVE OGAN expressed reservation about putting the
regulations in statute. He thought that maybe it would be wise to
put some type of sunset on this provision of the bill. He also
asked if this would not load up the legislature with contract
negotiations. His experience had been that contracts were
something that were negotiated on a case-by-case basis.
Number 598
REPRESENTATIVE VEZEY explained this was not a mandate to do
anything, but just allows the department to consider this as an
option. Should there be enough public demand, then the legislature
can tighten up the language to make it more mandatory. He thought
that Representative Ogans concerns were addressed in this bill.
He also stated that if the legislature wanted to be more responsive
and accountable, then it had to accept more responsibility for
their work product.
REPRESENTATIVE GREEN agreed there was a dilemma with the amount of
regulations currently on the books, but also found the DMV to be a
very responsive agency. He stated his concern was that if
something was found to need addressing in July, then it could not
be addressed by the legislature until the next session. He thought
that regulations were theoretically based on statute and if given
an outline to follow by the legislature, they should adhere to
those guidelines. If they dont, the legislature could then
address the concerns they have without having to address these
contracts on a yearly basis. He thought the legislatures plate
was full already.
CHAIR JAMES commented the solution to this problem was to have
oversight of regulations, which she thought could very simply be
accomplished. She said this was a whole other subject.
Number 624
MS. KNUTH answered the problem with a contract that states must
read as follows, is if there is a problem discovered when the
legislature was not in session, she did not know how it could be
addressed until the legislature convenes. She said the language of
the contracts look good, but she could not say if they were
comprehensive. She said until you start using these contracts, you
cannot know what problems may arise.
CHAIR JAMES stated her inclination was to ask what damage would be
done. Wouldnt it only be that you would be delayed from entering
into a contract until the following legislative session. Those
people who had already entered into a contract would be bound by
the terms of those contracts. Should a change be necessary, then
the only damage would be that the DMV could not enter into any new
contracts until the next legislative session.
Number 645
MS. KNUTH stated their concern was more that if there was a
provision that was not addressed, that it could lead to litigation.
Should there need to be something addressed, she thought one of the
two parties would possibly face an economic loss. She did not
think it would be a case of not entering into a contract, but
rather making do with the existing provisions and then making up
for any deficiencies in litigation.
MS. HENSLEY said the department would echo the concerns of the
Department of Law. Should they enter into a contract that changes,
then under this law they would have to go back to terminate that
contract. Once the contracts were terminated, then the contractor
would have the right to go to arbitration to get the issue
resolved. She thought this would be costly and time-consuming to
the department.
CHAIR JAMES stated her experience with contracts suggested that
when they realize there is something missing in the agreement, they
do an addendum, but do not throw out the whole contract. Thus, she
fails to see the scenario they suggest. She thought that only the
amendment would be on hold, and this could happen currently,
without the language of this bill.
MS. KNUTH said this was the problem with the specific language
being in statute. This doesnt allow the Administration the
flexibility to negotiate should any changes be necessary.
CHAIR JAMES stated she understood those concerns, but asked if they
wanted to have the freedom to have a contract with one agent that
was different from the one they have with another. She thought
this could create a problem, and that was what having the contract
in statute prevented.
MS. KNUTH did not foresee having different contracts with different
agents, but was thinking in terms of refinement that may be needed
with all of their contracts.
CHAIR JAMES stated that it sounded as if they were saying that they
had not really looked at this language well enough to know what was
necessary to be in the language of the statute.
MS. KNUTH said she had looked at this language, but felt that until
the situation was implemented, you may not know of all of the
changes that may be needed. She said there could be a change in
federal or state law that could mean a change would be necessary in
the contracts. She felt the use of the legislature to micro-manage
something as technical as this was inappropriate, when what was
needed was the policy considerations and guidelines.
Number 690
REPRESENTATIVE ROBINSON asked if there was a way this language
could be refined to allow for addendums to contracts.
REPRESENTATIVE VEZEY answered that the contracts were worded that
a contract agent must follow state and federal law. Should the law
change, the contracts change to reflect this change of law. He
stated they were not locked into a prior law. The basic nature of
a contract, he said, was that two people could agree to anything.
With this language, they were trying to set up the grounds for
termination of the contract by the state and the commitments of the
contractor to comply with the law.
TAPE 95-54, SIDE B
Number 000
REPRESENTATIVE GREEN agrees with the idea to legislatively fix
something that has runamuck, he still agrees with the idea of
having departmental regulations that are under the guidelines of
the legislature. He was concerned that should the legislature
continue to pass legislation, where the legislature dictates all
things and by-passes the regulatory process, then this was
overkill. He felt this was a case where the legislature was trying
to micro-manage things that is should not be. He stated the
legislature should just be giving guidelines for these contracts.
If these contracts do not comply with these guidelines, then the
legislature should address this with the agencies to get them
fixed.
Number 070
REPRESENTATIVE OGAN stated there were statutes that set forth the
legal form, stating the documents should read substantially as
follows or substantially in a similar form. He thought maybe it
would be appropriate to have a conceptual amendment that would
change the verbiage on page 7, line 12, to read The contract
required under AS 28.12.110(b) for third party agents must read
substantially as follows. Combining this with some legislative
oversight as necessary, he felt would solve the problem. He
thought that maybe these contracts could be reviewed by the sponsor
and be a win-win situation for everyone.
Number 102
REPRESENTATIVE VEZEY said there were three contracts, depending on
the type of service the agent wants to engage in. They are all
worded very similar, stating that the third party agent agrees to
comply with all applicable statutes and administrative regulations
of the state of Alaska and all applicable federal laws, including
regulations of the Federal Highway Administration, and with all
applicable municipal ordinances. Thus, should the state wish to
arbitrarily change a contract condition, then they have the ability
to write a regulation. The contractor has no choice but to follow
that regulation. He thought they had given the department a
tremendous amount of responsibility. He reiterated the contract
changes anytime the law changes.
REPRESENTATIVE PORTER stated he did not know of any other contracts
that were in statute. He asked why it was appropriate to put this
contract in statute, even with the verbiage of these terms, as
opposed to the suggested verbiage of what terms should be in the
contract.
REPRESENTATIVE VEZEY answered the reason was that the state had
such a poor record of privatization. He felt if they were going to
push the Administration towards privatization, then it would be
necessary to use a few more tools than had been used in the past.
REPRESENTATIVE PORTER did not disagree, but felt it was ironic that
this involved the one agency that had taken some steps to privatize
itself.
REPRESENTATIVE VEZEY replied that this was correct and he was not
sure how they happened to focus on this particular agency. He
stated they had tried to look toward other areas that had been
successful in privatization in government and the one area that
stood out was the Federal Aviation Administration. Much of that
service has successfully been privatized and is so commonplace that
people do not even think about it.
Number 166
CHAIR JAMES commented this bill is really plowing new ground and
not really wanting to be facetious, but the concerns she is hearing
from the Department of Law is the type she would expect to hear
from attorneys. She stated she had just finished reading The
Death of Common Sense and suggested that anyone who had not read
this, do so. This book tells how precise government has tried to
be over the past 30-40 years. Being so precise creates loopholes.
She stated as an example, the 36,000 pages of the regulations of
the Internal Revenue Service. The more it is attempting to try to
cover every detail of a situation, the more the likelihood is that
someone will discover a loophole. It was her experience that the
KISS (Keep it simple stupid) method works better. She stated this
dispute will always take place with the legal profession, as that
is their job. She thought there needed to be some common ground,
between being too cautious and careless. She thought that, should
this common ground be found, there would be less litigation as a
result. She argued that the language in this bill finds that
common ground, and the only thing that will happen should these
contracts be insufficient, is that the Administration will be
before the legislature next year without having finished the
contractual agreements. This would be the stop-gap. Should this
happen, that they have to come before the legislature the following
year, then she asks what would be lost. She agrees there is a
place to write regulations and a place to write statutes.
Currently, there is a problem with finding the balance of this
relationship between the statute writers and the regulation
writers. She agreed this may be overkill, but sometimes it is
necessary to overcorrect to find the proper balance.
Number 212
REPRESENTATIVE GREEN understood the frustration being felt with the
regulatory process, but he wondered if the compromise suggested by
Representative Ogan was not a better idea. Should they set the
guidelines of the contracts, while allowing for some flexibility,
they could then revisit them next year and make changes if the
Administration did not follow legislative intent. He added this
would allow for legislative review, while removing the handcuffs of
the precise language.
Number 239
MS. KNUTH stated if the sin of attorneys is trying to be precise,
then this bill is guilty of that sin as well. It is setting out
with total precision of what that contract is going to say. By
keeping it simple, the legislature would set out just the
parameters of the contract, but not the exact language. This will
just help those seeking to find the loopholes in the contracts.
Thus, she agreed with the comments of Representative Green.
CHAIR JAMES asked if the existing language, as indicated by the
sponsor, does not already allow for changes in state or federal
law. She thought this language was pretty comprehensive.
MS. KNUTH answered by stating an example on page 8, line 27, of an
agreement where the third party agent agrees to provide as required
by AS 28.12.150. She asked who would know in the future that this
statute was the only applicable requirement for insurance. Should
there be another unspecified statute that is applicable, then the
vendor could say they do not have to comply. Another possibility
would be that the revisor of statutes changes this statute to
another number, which is then unspecified in this contract. These
were the reasons this language was too restrictive in allowing the
department to solve any future problems that may arise.
Number 273
REPRESENTATIVE VEZEY said he had no problem with some
wordsmithing on the language of this contract, but suggested that
any concern of the Department of Law could be addressed by deleting
subparagraph 2. He stated they had already said the agent would be
required to comply with all applicable laws, and so it was not
necessary to specify the requirement to comply with insurance laws
under statute AS 28.12.150. His interpretation of this meant that
the contractor was required to comply with any insurance
requirements and not just those of AS 28.12.150. He reiterated
that the wording of this contract is very specific that the agent
is required to comply with the law, and so if the law changes, the
contract changes.
Number 292
REPRESENTATIVE PORTER feels she picked a good example, since having
heard this bill before in the Transportation Committee, she just
found an example of a paragraph that could be removed from this
bill. He stated this was a close call, since he agrees that there
is a real need for regulation reform and that some agencies
runamuck, but felt this was the wrong agency they were picking
on. He also thought this was a situation of micro-managing, which
the legislature says they do not like to do. Thus, he would
support the idea of adding the wording substantial similarity to
the wording of the bill.
CHAIR JAMES asked if he would make this in the form of a motion, as
a conceptual amendment.
REPRESENTATIVE PORTER moved that on page 7, line 13, the verbiage
be amended to read for a third party agent must substantially read
as follows, and that this language be adopted at the appropriate
places throughout the bill.
CHAIR JAMES asked if there was any discussion on that amendment.
REPRESENTATIVE VEZEY stated for the record that this amendment
would also apply to page 10, line 15 and page 13, line 14.
CHAIR JAMES asked if there was any objection to this amendment.
Hearing none, the amendment passed. She asked if there was any
other discussion.
REPRESENTATIVE GREEN moved to pass CSHB 210(TRA) as amended with
individual recommendations and a zero fiscal note.
CHAIR JAMES asked if there were any objections. Hearing none, the
bill passed out of committee.
HB 270 - RETIREMENT INCENTIVE PROGRAM
Number 359
CHAIR JAMES announced that they had a rather full schedule and it
seemed obvious they would not be able to hear all of the bills at
this meeting. She was looking for a time to schedule another
meeting to complete their calendar of bills, noting that all
committee hearings were scheduled to close by the following day.
She suggested she may try to hold a meeting at the call of the
Chair, if that was possible.
REPRESENTATIVE PORTER, Chair, Subcommittee on HB 270, stated that
subcommittee met and received information from the Administration
on the specific concerns they had and were furnished with examples
of how the system would be applied. He felt that all of the
questions from the subcommittee were answered to their
satisfaction. He stated he was satisfied by the answers from the
Administration, that the bill and their application of the bill,
would result in this program only being administered to divisions
and individuals where they can establish, at that time, that there
will be a cost savings. He was still concerned that there was no
guarantee that the budget of that unit will decrease the next year
by that amount. He said this was the historic problem with former
retirement incentive programs (RIP) and he did not have an answer
for that concern. He suggested that seeing that the budget
decrease was the responsibility of the legislature and trying to
come up with solutions towards that goal is everyones job. He
recommended passage of the bill out of committee.
CHAIR JAMES mentioned her amendment for HB 270, version A/1, which
she prepared at the request of people from Kodiak. It was her
understanding that the Administration had no problem with this
amendment. She asked that the representatives from the
Administration address this amendment, as well as the bill, when
making their presentation.
Number 430
BOB STALNAKER, Director, Division of Retirement Benefits,
Department of Administration, stated that having reviewed the
proposed amendment, their concern was of timing and being able to
meet the needs of employers as they set these time frames. He
thought this amendment would accommodate these concerns. He stated
he had some suggestions regarding the dates proposed in the
amendment, which would make it more likely that the Administration
could respond appropriately to employers as they set these dates.
On the amended portion of the bill, on page 8, he suggested that
the date be changed from October 1 to October 31, because under
Alaskas retirement statutes, a person is appointed to retirement
the first day of the month following their application. Thus, by
setting the date of October 1, the individual would have to wait a
whole month, until November 1, before they could be appointed for
retirement. Thus, former RIP bills have specified the end of the
month. Still referring to the amendment, on line 10, where it
states 30 days after their establishment, they suggested changing
that to 60 days. That would require the applicant to notify the
Administration at least two months in advance of a window period,
to give them time to gather information and discuss employee
benefits. Referring to the bill, he suggested changing the date on
page 5, line 25, from July 1 to June 30. This was because in the
teacher retirement system, their service goes through June 30 and
they retire July 1. Then they could apply on June 30 and retire on
July 1.
CHAIR JAMES said they had already heard the presentation from the
Administration at an earlier meeting and suggested they hear from
those individuals on teleconference.
Number 456
MARK LIVINGSTON, in Ketchikan, expressed his support for HB 270.
He felt this would help the local school district with their
budgeting problems. He cited several examples of areas where the
school district had already made cuts. He saw this bill as
beneficial by replacing retiring teachers with new ones at a lower
pay rate. This would save the school districts a substantial
amount of money. He stated the Ketchikan School District was
facing a $200 thousand plus deficit for the next year with the
funding unit at $61 thousand. There was some discussion of cutting
this unit rate to $59 thousand, placing a further strain on the
system. According to the Ketchikan School District Manager, there
are currently about 40 teachers in the district eligible to retire.
Should this bill pass, the school district could save from $67,452
to $85,716 for each retiring teacher over a three year period. He
quoted an article from U.S. News and World Report, that 75 percent
of the largest U.S. companies had offered some type of earlier
retirement incentive program. He thought these types of programs
were one of the more viable methods of saving money and thanked the
committee for hearing his testimony.
MR. STALNAKER mentioned there was one other date he suggested
amending. This was on page 4, line 20, and he suggested changing
the date from July 1 to June 30. Should the state use this in next
year's budget and the budget cut was effective on July 1, then
individuals would be in essence terminated before they could take
advantage of the retirement incentive program on August 1.
Number 512
REPRESENTATIVE PORTER moved to adopt amendment A/1, dated 4-22-95,
to HB 270, while also asking for a friendly amendment to this
amendment to change line 8 to read October 31, instead of October
1 and on line 10 to reference 60 days, rather than 30 days.
CHAIR JAMES asked if there was any objection to that amendment.
Hearing none, the amendment was adopted.
REPRESENTATIVE PORTER moved to adopt amendment #2, to alter page 4,
line 20, of HB 270, July 1 to read June 30 and on page 5, line 25,
July 1 would also be amended to read June 30.
CHAIR JAMES asked if there was any objection to those amendments.
Hearing none, they were adopted. She asked if there was any other
discussion on this bill, before they considered passing it out of
committee.
Number 530
REPRESENTATIVE OGAN had asked in the subcommittee if this bill
would be cost-effective not only in the short term, but the long
term as well. There had been only one subcommittee meeting and he
felt he had not had his question satisfactorily answered.
CHAIR JAMES asked if he had not received copies of the
documentation from the Administration. She asked Representative
Porter to respond to this question.
Number 541
REPRESENTATIVE PORTER stated he had instructed that all members of
the committee would receive copies of the documentation, including
flow charts, of how the bill would work. Additionally, there had
been copies of the audit reports of the two previous RIP bills.
Having reviewed this information, he had reached the conclusion
that this bill was an improvement over the past RIP bills,
especially in the way it was intended to be implemented. He felt
Representative Ogan was correct that there was no documentation of
long term savings as there was no way to establish this
information. How this is implemented as a cost savings is up to
the coordinated efforts of both the legislature and the
Administration.
Number 560
CHAIR JAMES expressed some of her concerns and attitudes to the
committee. She had reservation of using RIP bills to save money.
She stated that industry does not do this to save money, but for
employee morale and to make it easier to determine who stays and
who goes when downsizing is necessary. She felt this was the
current situation of the state at this point. She argued that
although the state has been reducing the size of its work force,
the legislature had not done a good job of reviewing the statutes
and reducing the functions that these people are performing.
Because this has not been accomplished, there will be fewer people
performing the same amount of work. She felt this would have an
affect on the morale of the people who work for the state. She
thought that by improving the feeling of those individuals working
for the state, it would make them more willing to assist in
reducing the cost of state government. She thought it was likely
that there could be some money saved in the school districts, but
had some concerns about replacing experienced teachers with new
ones. Her own school district had expressed concern about
replacing experienced teachers with first year applicants. Her
district was taking a neutral position on this bill, feeling there
were employees who were waiting to retire, until there was another
RIP bill that was more advantageous. She expressed concern that
having a series of RIP bills was like having a store that always
had sales. Items are priced and then sold at half-price, causing
people to think they are getting a good deal. Should you want a
good relationship in any kind of any employee situation, then you
need to set a plan that works and you need to stick with it. In
the past, it was necessary to raise the salaries of governmental
employees to compete with those of the pipeline and other private
sector industry. Now that there is less funding available, the
dilemma is how to get back down to a salary that is reasonable to
pay. She did not know that this bill would accomplish this goal,
but was willing to pass it out of committee, because she thought it
did have some merit. To do this, she said she had to put a lot of
faith in the Administration, that the things they have promised to
do, will be done for the efforts and conclusions they have
indicated and that they will be selective and responsive to achieve
the results desired. She called for a motion from the committee to
pass this bill out of committee.
Number 614
REPRESENTATIVE PORTER added there was a reporting mechanism
included in this bill and moved to pass CSHB 270 as amended with
individual recommendations and attached fiscal notes.
CHAIR JAMES asked if there was any objection. Hearing none, the
bill passed out of committee.
HB 241 - NO PERSONAL USE OF CAMPAIGN ACCOUNT
CHAIR JAMES announced the next meeting would be held at the call of
the Chair, if she could arrange a time to get the committee
together. She stated the next bill on the agenda was HB 241.
Number 656
REPRESENTATIVE CON BUNDE mentioned he had prepared a proposed
committee substitute to address some of the concerns raised by the
committee at a previous meeting. These concerns dealt with
defining what was meant by a charity and personal income. He
directed their attention to Section F of the committee substitute,
which clarified that this bill was intended for state offices only
and that charitable organizations were defined by the Internal
Revenue Service definition.
Number 670
CHAIR JAMES stated that in the past, there were items which could
be considered campaign expenses that were really personal in
nature. Should these be audited by the IRS, they may be required
to count those as personal expenses. She cited examples as car
repairs and baby-sitting. These could be considered personal
income, but they are allowed to fund these out of their campaign
accounts by simply reporting it. She asked if this situation would
change under this bill.
REPRESENTATIVE BUNDE replied it did not, adding this was between
the legislator, their constituents, and the IRS.
CHAIR JAMES asked if this applied to individuals that were no
longer candidates for public office, or if it applied to all
candidates.
REPRESENTATIVE BUNDE answered a candidate could still take money
from their campaign account and put it into their personal account,
as long as they report it as under existing Alaska Public Offices
Commission (APOC) regulations. Having heard the concerns
expressed, he felt that any payment made from the campaign account,
as long as it was reported, would be left to the discretion of the
legislator.
Number 693
REPRESENTATIVE GREEN asked if a legislator bought an item, such as
a printer and computer to handle constituent mail and which may not
depreciate rapidly, it could be argued that at the time of leaving
office this item was worth less than $1,000, but at the time of
acquisition it was worth more than $1,000. He asked how this bill
would affect this situation.
TAPE 95-55, SIDE A
Number 000
REPRESENTATIVE BUNDE replied that at the year-end report for the
year it was acquired, this would be required to be reported. When
that individual is no longer a candidate, they are no longer
required to make these year-end reports.
REPRESENTATIVE GREEN asked if this could be a loophole.
REPRESENTATIVE BUNDE said he did not think so, because if that
individual disposes of an item, then this is required to be
reported. He reiterated that this bill was just trying to bring
the sunshine in on the process. He thought the public would be
the best judge of how a legislator handles their affairs.
Number 032
REPRESENTATIVE PORTER stated he was reading Section E of the bill.
Currently, a legislator has the option of taking their office money
as income and pay taxes on it or not. Should they take campaign
money and transfer it to their office account, as he said most
legislators have to do to print two constituent newsletters, then
they can currently take this as personal income and either pay
taxes on it or not. He asked if this bill would require a
legislator to report on expenses out of that account.
REPRESENTATIVE BUNDE stated that this bill would require that
campaign money that went into the office account would have to be
reported with an APOC report as campaign spending.
REPRESENTATIVE PORTER verified that the existing process would
remain intact without any additional reports being necessary. He
stated that being honest, he chose this option, because as a former
and current public official, whose life has been under public view,
he liked to take any option available to make any aspect of his
life private. Thus, he would prefer to keep his own records of his
office account.
Number 069
CHAIR JAMES said the statement included in AS 15.13.105, dealing
with the use of the balance of a state candidates campaign account
disposition of assets, indicates that this occurs at some point of
finality. However, it continues to say that a candidate for state
office, may not take money from the surplus balance of the
candidates campaign account as personal income. She could foresee
a situation where an individual may have to quit their job to run
for public office. They may need to take money out of their
campaign account for personal use during the campaign. She asked
if this could be done under this bill.
REPRESENTATIVE BUNDE replied it could be done, as long as it was
reported to the APOC.
CHAIR JAMES said this statement did not say that. It stated that
a candidate for state office may not take money from the surplus
balance of a candidates campaign account, as personal income, and
every time an APOC report is made, the balance of your campaign
account is considered surplus balance.
REPRESENTATIVE BUNDE responded that Brooke Miles from the APOC was
available to testify and he would defer that question for her to
answer. He reminded the committee that this bill only dealt with
candidates who were no longer running for office. He commented
that a candidate still planning to run for office, by definition
does not have a surplus of money in their campaign account.
CHAIR JAMES disagreed. She pointed out that any money left in the
account at the time of filing an APOC report is considered surplus
funds.
REPRESENTATIVE BUNDE clarified that it was not a surplus for the
purposes of campaigning. Those funds would not be there if they
were not intended to be used for a campaign.
CHAIR JAMES thought this wording needed to be clarified, because
the current APOC reports refer to this money as a surplus.
REPRESENTATIVE BUNDE asked to have Brooke Miles comment, because
the intent was to have this apply when a person was no longer a
candidate.
Number 124
BROOKE MILES, Juneau Branch Administrator, Alaska Public Offices
Commission, suggested that the APOC would consider it a surplus
balance only when the candidate was closing their campaign account.
This could happen when they were closing one account to open
another for a new campaign, or if they were no longer running for
public office. She thought maybe this could be solved by an
amendment to Section A, which says a candidate who is closing a
campaign account may not take income from their campaign account
as personal income.
CHAIR JAMES stated it would be hard to fix this bill to her
satisfaction, as she was opposed to the bill. Should it pass over
her objections, she would at least like it to be as least
objectionable as possible.
REPRESENTATIVE GREEN asked if this would supersede those statutes
dealing with the filing process on a surplus balance.
MS. MILES responded that this would provide guidelines, but added
that the current process was in commission regulations, not
statute. It is interpreted to mean the surplus monies when a
candidate is closing a campaign account.
REPRESENTATIVE PORTER asked Ms. Miles if she had heard his example
of transferring monies from a campaign account to an office account
for purposes of printing a newsletter. If this bill were law,
would this be a violation of APOC code?
MS. MILES answered it would not be a violation, but the legislator
would be required to report how this money was used.
REPRESENTATIVE PORTER stated that was his concern.
ADJOURNMENT
CHAIR JAMES said they would have to adjourn this meeting, because
the Speaker was requesting their presence on the House chambers
floor. She adjourned the meeting at 10:28 a.m. She stated this
meeting would be continued at the call of the Chair.
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