Legislature(1995 - 1996)
03/14/1996 08:08 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
March 14, 1996
8:08 a.m.
MEMBERS PRESENT
Representative Jeannette James, Chair
Representative Scott Ogan, Vice Chair
Representative Joe Green
Representative Ivan Ivan
Representative Brian Porter
Representative Caren Robinson
Representative Ed Willis
MEMBERS ABSENT
All members present.
COMMITTEE CALENDAR
HOUSE BILL NO. 110
"An Act relating to the confidentiality of certain information in
motor vehicle records; and providing for an effective date."
- PASSED CSHB 110(STA) OUT OF COMMITTEE
* HOUSE BILL NO. 415
"An Act streamlining the functions of state government, including
authorizing the commissioner of fish and game to award grants for
certain resource activities; allowing agents selling fish and game
licenses and tags to retain certain compensation; authorizing the
Department of Health and Social Services to award grants for
certain services for developmentally delayed or disabled children;
relating to rabies control and administration of flour and bread
standards by the Department of Environmental Conservation;
repealing the Athletic Commission, the regulation of boxing and
wrestling, the certification of professional geologists, and the
Water Resources Board; repealing certain filing statements and
bonds for enforcement and collection of certain taxes; and
providing for an effective date."
- PASSED CSHB 415(STA) OUT OF COMMITTEE
HOUSE BILL NO. 443
"An Act relating to the tax on transfers or consumption of motor
fuel, and repealing the exemption from that tax for motor fuel
which is at least 10 percent alcohol by volume; and providing for
an effective date."
- PASSED CSHB 443(STA) OUT OF COMMITTEE
(*First public hearing)
PREVIOUS ACTION
BILL: HB 110
SHORT TITLE: CONFIDENTIALITY OF MOTOR VEHICLE RECORDS
SPONSOR(S): REPRESENTATIVE(S) BARNES, Green
JRN-DATE JRN-PG ACTION
01/23/95 116 (H) READ THE FIRST TIME - REFERRAL(S)
01/23/95 116 (H) STATE AFFAIRS, FINANCE
01/25/95 136 (H) COSPONSOR(S): GREEN
03/10/95 701 (H) SPONSOR SUBSTITUTE INTRODUCED-REFERRALS
03/10/95 701 (H) READ THE FIRST TIME - REFERRAL(S)
03/10/95 701 (H) STATE AFFAIRS, FINANCE
03/07/96 (H) STA AT 8:00 AM CAPITOL 102
03/12/96 (H) STA AT 8:00 AM CAPITOL 102
03/14/96 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 415
SHORT TITLE: OMNIBUS STATE AGENCY OPERATIONS & PROGRAM
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
JRN-DATE JRN-PG ACTION
01/12/96 2429 (H) READ THE FIRST TIME - REFERRAL(S)
01/12/96 2429 (H) STATE AFFAIRS, HES, RESOURCES, FINANCE
01/12/96 2429 (H) 2 FISCAL NOTES (F&G, DCED)
01/12/96 2429 (H) 5 ZERO FNS (REV, DNR, 2-DHSS, DEC)
01/12/96 2429 (H) GOVERNOR'S TRANSMITTAL LETTER
03/14/96 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 443
SHORT TITLE: INCREASE MOTOR FUEL TAX
SPONSOR(S): RULES BY REQUEST OF LONG RANGE FINANCIAL PLAN CMSN
JRN-DATE JRN-PG ACTION
01/22/96 2508 (H) READ THE FIRST TIME - REFERRAL(S)
01/22/96 2508 (H) STATE AFFAIRS, JUDICIARY, FINANCE
03/12/96 (H) STA AT 8:00 AM CAPITOL 102
WITNESS REGISTER
ELEANOR ROSER, Legislative Administrative Assistant
to Representative Ramona Barnes
State Capitol, Room 403
Juneau, Alaska 99801-1182
Telephone: (907) 465-3438
POSITION STATEMENT: Provided committee substitute for HB 110.
JUANITA HENSLEY, Chief
Driver Services
Division of Motor Vehicles
Department of Public Safety
P.O. Box 20020
Juneau, Alaska 99811-0020
Telephone: (907) 465-4361
POSITION STATEMENT: Provided testimony on HB 110.
EDWARD DAUGHERTY, Vice President
Alaska Archives, IMS Inc.
165 East 56th Avenue, Suite 1
Anchorage, Alaska 99578
Telephone: (907) 561-8000
POSITION STATEMENT: Provided testimony on HB 110.
NANCY SLAGLE, Director
Budget Review
Office of Management and Budget
Office of the Governor
P.O. Box 110020
Juneau, Alaska 99811-0020
Telephone: (907) 465-4699
POSITION STATEMENT: Provided testimony on HB 415.
GERON BRUCE, Legislative Liaison
Office of the Commissioner
Department of Fish and Game
P.O. Box 25526
Juneau, Alaska 99811-5526
Telephone: (907) 465-6143
POSITION STATEMENT: Provided testimony on HB 415.
BOB BARTHOLOMEW, Deputy Director
Central Office
Income and Excise Audit Division
Department of Revenue
P.O. Box 110420
Juneau, Alaska 99811-0420
Telephone: (907) 2320
POSITION STATEMENT: Provided testimony on HB 415.
JANICE ADAIR, Director
Division of Environmental Health
Department of Environmental Conservation
555 Cordova Street
Anchorage, Alaska 99501
Telephone: (907) 269-7644
POSITION STATEMENT: Provided testimony on HB 415.
JEFFREY W. BUSH, Deputy Commissioner
Office of the Commissioner
Department of Commerce and Economic Development
P.O. Box 110800
Juneau, Alaska 99811-0800
Telephone: (907) 465-2500
POSITION STATEMENT: Provided testimony on HB 415.
NICO BUS, Acting Director
Central Office
Division of Support Services
Department of Natural Resources
400 Willoughby Avenue
Juneau, Alaska 99801-1724
Telephone: (907) 465-2406
POSITION STATEMENT: Provided testimony on HB 415.
JOE THOMAS, State Accountant
Division of Finance
Department of Administration
P.O. Box 110204
Juneau, Alaska 99811-0204
Telephone: (907) 465-5616
POSITION STATEMENT: Provided testimony on HB 415.
MIKE MCMULLEN, Merit System Personnel Manager
Central Office
Division of Personnel
Department of Administration
P.O. Box 110201
Juneau, Alaska 99811-0201
Telephone: (907) 465-4431
POSITION STATEMENT: Provided testimony on HB 415.
MARIANNE K. BURKE, Director
Central Office
Division of Insurance
Department of Commerce and Economic Development
P.O. Box 110805
Juneau, Alaska 99811-0805
Telephone: (907) 465-2515
POSITION STATEMENT: Provided testimony on HB 415.
JOHN GEORGE, Lobbyist
American Council of Life Insurance
National Association of Independent Insurers
3328 Fritz Cove Drive
Juneau, Alaska 99801
Telephone: (907) 789-0172
POSITION STATEMENT: Provided testimony on HB 415.
SAM KITO III, Legislative Liaison/Special Assistant
Office of the Commissioner
Department of Transportation and Public Facilities
3132 Channel Drive
Juneau, Alaska 99801-7898
Telephone: (907) 465-3904
POSITION STATEMENT: Provided testimony on HB 443.
ACTION NARRATIVE
TAPE 96-35, SIDE A
Number 0000
The House State Affairs Committee was called to order by Chair
Jeannette James at 8:08 a.m. Members present at the call to order
were Representatives Ogan, Green, Porter, Willis and James.
Members absent were Representatives Ivan and Robinson.
HB 110 - CONFIDENTIALITY OF MOTOR VEHICLE RECORDS
The first order of business to come before the House State Affairs
Committee was HB 110.
CHAIR JEANNETTE JAMES called on Eleanor Roser, Legislative
Administrative Assistant to Representative Ramona Barnes, to
present the committee substitute (9-LS0490/G).
Number 0080
ELEANOR ROSER, Legislative Administrative Assistant to
Representative Ramona Barnes, explained the provisions of the
federal law were included at the request of the House State Affairs
Committee in the committee substitute. The provisions described
the circumstances for disclosure by the Division of Motor Vehicle
(DMV).
CHAIR JAMES called on Juanita Hensley, Department of Public Safety.
The record reflected the arrival of Representative Caren Robinson
at 8:09 a.m.
Number 0121
JUANITA HENSLEY, Chief, Driver Services, Division of Motor
Vehicles, Department of Public Safety, stated the committee
substitute met the requirements of the federal act. It also met
the requirements of the model law drafted by the American
Association of Motor Vehicle Administrators. It was not over
extensive and was in compliance with the Privacy Act.
Number 0195
CHAIR JAMES thanked Ms. Hensley for her work on the committee
substitute.
Number 242
MS. HENSLEY stated the committee substitute did not include drivers
license information that was required in the federal act. The
drivers license information was already prohibited in statute.
Number 0278
REPRESENTATIVE CAREN ROBINSON asked if the committee substitute
clarified what was required to meet the federal standards?
Number 0288
MS. HENSLEY replied, "yes it does."
Number 0302
REPRESENTATIVE GREEN moved to adopt CSHB 110(STA) (9-LS0490/G) as
a working document. Hearing no objection, it was so adopted.
Number 0376
REPRESENTATIVE ROBINSON moved that CSHB 110(STA) move from the
committee with individual recommendation and attached fiscal notes.
CHAIR JAMES explained there were witnesses to testify.
REPRESENTATIVE ROBINSON held her motion.
CHAIR JAMES called on the first witness via teleconference in
Anchorage, Edward Daugherty.
Number 0437
EDWARD DAUGHERTY, Alaska Archives, explained his company provided
DMV information on microfiche and CDROM. The information was
generally sold to banks, collection agencies, and private
investigators, for example. He was concerned about the individuals
with a legitimate need for the information. The bill did not
provide the infrastructure to acquire that information from the
DMV.
Number 0521
CHAIR JAMES commented DMV could provide that information through a
conduit agreement.
Number 0554
MR. DAUGHERTY replied his company was comfortable with that. He
was not as comfortable, however, because a provision was not
included in the bill to ensure that. He complemented Ms. Hensley
for her cooperation. However, other offices within the DMV were
not always as cooperative by restricting information. He
reiterated he wanted further assurance that he would be able to
access the information.
The record reflected the arrival of Representative Ivan Ivan and
8:13 a.m.
Number 0644
REPRESENTATIVE PORTER asked, if the business of Mr. Daugherty would
be perceived as giving information to the public, or to someone who
had a legitimate need?
Number 0662
MS. HENSLEY wondered if Mr. Daugherty was looking at the committee
substitute. The committee substitute allowed the DMV to release
information to him, however, there were restrictions on how he
could release the information to the public.
Number 0688
CHAIR JAMES asked Mr. Daugherty if he had committee substitute
version 9-LS0490/G?
MR. DAUGHERTY replied, "no."
Number 0698
CHAIR JAMES announced her staff would fax one to him immediately in
Anchorage. Furthermore, although she was supportive of a
sufficient statute so that regulations were not needed, the
Division of Motor Vehicles needed to subsume some of the
responsibilities. She did not want to include a conduit
relationship in the bill.
Number 0748
MR. DAUGHERTY replied he welcomed the bill. It was needed, as-
long-as there was a provision that allowed equal access for those
that had a compelling need, he supported the bill and was happy
with it.
Number 0789
CHAIR JAMES felt some of her rights were being taken away. She
wanted to be able to identify someone on the road. She reiterated
it was an intrusion of our freedoms.
Number 0855
REPRESENTATIVE ROBINSON reiterated her motion. Hearing no
objection, it was so moved from the House State Affairs Committee.
HB 415 - OMNIBUS STATE AGENCY OPERATIONS & PROGRAM
The next order of business to come before the House State Affairs
Committee was HB 415.
CHAIR JAMES called on Nancy Slagle, Office of the Governor, to
introduce the bill.
Number 0934
NANCY SLAGLE, Director, Budget Review, Office of Management and
Budget, Office of the Governor, thanked the House State Affairs
Committee members for the hearing today. The intent of HB 415 was
to identify inefficient areas within state government and to
correct them. She referred the committee members to a spreadsheet
prepared summarizing a sectional analysis of the bill.
MS. SLAGLE explained Section 1 related to the Department of Fish
and Game. It allowed the Department to award grants related to its
functions. Currently, it had to use another state agency that had
the authority to award a grant.
Number 1060
MS. SLAGLE explained Sections 2 - 4 also related to the Department
of Fish and Game. It allowed vendors of sport fishing and hunting
licenses and tags to retain the full 5 percent of their
compensation for their services.
Number 1109
CHAIR JAMES cited the Alaska Visitor Association (AVA) turned over
their net proceeds to the Alaska Marketing Council. An auditor
indicated that could be a violation because there was not an
appropriation back to the Association. She wondered if it was a
violation due to retaining the money as a result of a state item
being sold.
Number 1173
MS. SLAGLE replied the amount being retained by the vendors was not
identified in the appropriations. She stated any money spent from
the state treasury must have an appropriation. It did not fall
under the requirements of the law, but there was a need for the
legislature to look at the full cost of a program that might offset
the constitutional appropriation requirements. The Governor's bill
would give the appropriation authority for the amounts being
retained by the vendors.
Number 1286
CHAIR JAMES was also concerned about the individuals selling the
hunting and fishing licenses. She wondered if the compensation was
sufficient to cover their costs. She was also concerned about the
varying prices for the licenses. She asked the Department of Fish
and Game if the 5 percent compensation was sufficient?
CHAIR JAMES called on Geron Bruce, Department of Fish and Game, to
answer her concerns.
Number 1348
GERON BRUCE, Legislative Liaison, Office of the Commissioner,
Department of Fish and Game, replied no one had done an analysis of
her concerns. He stated, of the 1,400 vendors in Alaska, most
appeared satisfied. The Department had not received any
complaints. He stated there was a close working relationship
between the Department and the vendors. The Department often
sought their advise on how to improve the program. He reiterated
the anecdotal evidence indicated they were satisfied with the
program. Furthermore, the licensing process was difficult to
simplify because of the resident and nonresident structures.
Within the nonresident structure there were a number of short-term
licenses. It was designed to aide the visitor industry. There was
also the tag system. He said the Department could look at
simplifying the licensing programs, however. He explained the fee
structure was set by the legislature. Therefore, the Department
was trying to implement the program the legislature set forth.
Number 1473
CHAIR JAMES responded the cost of the licenses were imputed on the
public. She did not have a solution, but was happy to hear the
Department recognized it was complicated. It would probably need
to be corrected in the future, however.
Number 1520
REPRESENTATIVE ED WILLIS asked Ms. Slagle to explain the proposed
amendment that calculated terminal leave payments based on an
annualized rate of pay.
CHAIR JAMES replied it would be better to discuss the bill first
before discussing the amendments.
REPRESENTATIVE WILLIS held his question.
Number 1548
REPRESENTATIVE PORTER stated the concerns of a dedicated fund were
complex. It was more complex than requiring an appropriation for
the general fund, for example. The issue was still out there, he
stated, for the record.
Number 1594
MS. SLAGLE moving forward explained Section 5 related to the
Department of Commerce and Economic Development. It also related
to Section 10. It allowed a notice of action or legal proceeding
against a nonresident business owners for non-payment of taxes or
fees to be sent to the last known address. Section 10 repealed a
statute to eliminate the Nonresident Affidavit Tax Bond program.
Number 1644
BOB BARTHOLOMEW, Deputy Director, Central Office, Income and Excise
Audit Division, Department of Revenue, explained Section 10
referenced two state statutes - Title 16 and Title 43. Title 43
addressed the tax codes. He explained in 1955 a tax bond program
was enacted so that the a nonresident business would pay its taxes.
The Department of Revenue recommended that program be eliminated.
He said it had out lived its useful life. Alaska was the only
remaining state that still had a program like this. Furthermore,
the State had never collected against the bond. Other avenues were
used such as liens. Moreover, it required about 1,000 hours of
staff time to process 4,000 affidavits. He reiterated the
Department recommended the elimination of the program. He
explained Section 5, pages 3 - 5 deleted the language relating to
the Nonresident Affidavit Bond program.
Number 1761
REPRESENTATIVE PORTER wondered where the fiscal note was that
illustrated the money saved due to the elimination of the program.
Number 1767
MR. BARTHOLOMEW replied the Department of Revenue included a $0
fiscal note. The staff time saved would be used to enhance the tax
compliance programs. The compliance programs were reduced due to
a $450,000 division budget reduction in the last two years.
Number 1803
CHAIR JAMES wondered if that would produce a bigger positive fiscal
note.
MR. BARTHOLOMEW replied, "we feel it will." It was hard to
estimate, however.
REPRESENTATIVE PORTER said, "Bob, we're pulling your chain."
Number 1810
REPRESENTATIVE GREEN asked Mr. Bartholomew if the bond program for
residents had also been eliminated?
Number 1820
MR. BARTHOLOMEW replied there was no requirement for the instate
program. Furthermore, he explained the Anchorage Chamber of
Commerce and the Small Business Development Program at the
University of Alaska both supported the elimination of the Non-
resident Affidavit Tax Bond program.
Number 1834
MS. SLAGLE moving forward explained Sections 6 - 7 related to the
Department of Health and Social Services. It allowed the
Department to grant authority for the Infant Learning program
within the Division of Public Health. The program provided
services to children with developmental disabilities.
Number 1883
CHAIR JAMES said she understood the need for granting authority.
She wondered if it would interfere with individual granting
authority.
MS. SLAGLE replied, "no."
Number 1911
MS. SLAGLE moving forward explained Section 8 related to the
Department of Environmental Conservation. It repealed AS
03.05.070, eliminating the requirements that the department report
and care for animals suspected of rabies and the disposal of rabid
animals. It further repealed AS 17.07.010 - AS 17.07.200,
eliminating the requirements that the department regulate the
vitamin and mineral content of flour and bread sold in the state.
It was now regulated by the federal government.
Number 1947
REPRESENTATIVE WILLIS wondered what would happen if the rabies
provision was repealed.
CHAIR JAMES called on Janice Adair, Department of Environmental
Conservation, to address his concern via teleconference in
Anchorage.
Number 1960
JANICE ADAIR, Director, Division of Environmental Health,
Department of Environmental Conservation, replied the Department
rarely was involved in cases of rabid animals. Currently, the
local government, or in the villages, the public safety officers or
the public health officers, handled those cases. The DEC did not
have the expertise or the training to handle these cases.
Furthermore, the employees had not been vaccinated against rabies
presenting a life threatening situation. Furthermore, if a local
government did not have a program already, the Department would
work with them to help develop one.
Number 1998
CHAIR JAMES wondered what would happen to the regulations.
Number 2012
MS. ADAIR replied there were not any regulations.
Number 2028
MS. SLAGLE moving forward explained Section 9 related to the
Department of Commerce and Economic Development (DCED). It
repealed several statutes. Alaska Statute 05.05.010 eliminated the
Athletic Commission, AS 05.10.010 eliminated the Boxing and
Wrestling Commission, AS 08.02.011 eliminated the requirement to
certify professional geologists by the DCED, and AS 46.15.190
eliminated the Water Resources Board.
CHAIR JAMES called on Jeffrey W. Bush, Department of Commerce and
Economic Development, to further explain Section 9.
Number 2065
JEFFREY W. BUSH, Deputy Commissioner, Office of the Commissioner,
Department of Commerce and Economic Development, announced he was
here to answer any questions.
Number 2075
REPRESENTATIVE GREEN asked Mr. Bush, if anyone could practice the
field of Geology within the state, as a result of the repealed
statute?
Number 2082
MR. BUSH replied, "yes." However, there was no requirement for
certification at the present time anyway. It was not a
certification requirement, but an option that existed in the law.
He called it an administrative function whereby an individual
applied for a certificate stating he met the requirements upon
which a certificate was handed to him. The certificates were not
used for a purpose other than to hang on the wall. He cited many
individuals applied from other parts of the country because it was
well known and liked.
Number 2120
REPRESENTATIVE GREEN said, "send in the box top and a quarter."
MR. BUSH replied, "that's right." It was performed by the
director. He just looked at the paperwork and upon receipt of the
payment, a certificate was sent.
Number 2138
REPRESENTATIVE PORTER asked Mr. Bush if there would be any state
oversite if a promoter wanted to put on a boxing match in the
state?
MR. BUSH replied the reason for the elimination was due to a lack
of funding for the Boxing and Wrestling Commission. The options
were to either eliminate it or appropriate funds. The Department
saw it as a state liability because the statute required somebody
to attend the boxing matches, and, currently, there was not anybody
on staff that could do it for free. Furthermore, the way the
occupational licensing program worked, other programs could not be
charged for that type of oversite.
Number 2204
REPRESENTATIVE WILLIS wondered if there had been any reaction from
the sports fans regarding the elimination of the Athletic
Commission and the Boxing and Wrestling Commission.
Number 2211
MR. BUSH replied, "no." There had not been any response regarding
the bill.
Number 2217
REPRESENTATIVE SCOTT OGAN mentioned the brutal sport of kick
boxing. He wondered, if it were to come to Alaska, would the
Commission regulate that type of sport.
Number 2254
MR. BUSH replied that was the purpose of the Commission, to
regulate the type of activity Representative Ogan referred to.
However, he reiterated there was not any funding. The Department
was generally notified of events such as roughhouse boxing, and the
Department attempted to send a volunteer representative to the
matches. That was the extent of the regulatory oversite of the
state. He stated the program received approximately $1,400 per
year.
Number 2291
CHAIR JAMES wondered what would happen with the regulations
associated with the repealed statutes.
Number 2312
MR. BUSH replied the regulations would be repealed also. He said
it was easy for the Division of Occupational Licensing to keep up
with the repeal of regulations. He assured the committee members
the necessary regulations would be repealed.
Number 2340
REPRESENTATIVE ROBINSON wondered about the Athletic Commission.
She stated it had not been around very long.
Number 2347
MR. BUSH responded the Athletic Commission and the Boxing and
Wrestling Commission were viewed as the same operation. Therefore,
when he discussed the issues of the Boxing and Wresting Commission,
he was also referring to the Athletic Commission. The last meeting
of the Athletic Commission was in 1992. The funds did not exist.
There had also not been any appointments made in several years.
Number 2381
MS. SLAGLE moving forward explained Section 9 also eliminated the
Water Resources Board.
CHAIR JAMES called on Nico Bus, Department of Natural Resources, to
discuss Section 9 further.
Number 2402
REPRESENTATIVE OGAN asked Mr. Bus to explain the functions of the
Water Resources Board. He wondered if the functions of the Board
would be picked up by somebody else.
Number 2410
NICO BUS, Acting Director, Central Office, Division of Support
Services, Department of Natural Resources, explained the Water
Resources Board was an advisory board to the Governor. It advised
the Governor on the use and allocation of water. The Board had not
met since 1993 due to a lack of funding. In 1993 the funding was
deleted. It had been non-operational since that time.
Number 2447
CHAIR JAMES wondered if the billing of water rights was a function
of the Water Resources Board.
MR. BUS said the billing of water rights was an administrative
function performed through the Division of Mining and Water
Management.
TAPE 96-35, SIDE B
Number 0000
MR. BUS further stated the division was in the process of
permitting individuals with water rights. A fee would be
introduced of which would go to the state treasury.
Number 0023
MS. SLAGLE moving forward explained Section 10 related to the
Department of Fish and Game. It repealed AS 16.05.390(c) and (d),
eliminating the calculation required to transmit the remainder of
vendor compensation for issuance of sport fishing and hunting
licenses. She explained it was also tied to Sections 2 - 4.
Moreover, Section 10 also repealed AS 43.10.160, and AS 43.10.180 -
AS 43.10.200, eliminating the Nonresident Affidavit Tax Bond
program Mr. Bartholomew addressed earlier.
MS. SLAGLE moving forward explained Section 11 addressed
transitional language.
MS. SLAGLE explained Sections 12 - 14 addressed the effective
dates.
Number 0052
MS. SLAGLE explained Amendment 1 related to the Department of
Administration. It shortened the time limit on payments of
warrants from "2 years" to "1 year." She called on Joe Thomas,
Department of Administration, to explain the amendment.
Number 0070
JOE THOMAS, State Accountant, Division of Finance, Department of
Administration, explained the time limit was the main issue. The
unclaimed property statutes stated a payroll warrant and intangible
property were considered unclaimed property at one year.
Therefore, the amendment made the two consistent. Furthermore, it
would allow the agencies to review the warrants earlier to prevent
inadvertently turning one over to a fee finder. He reiterated the
goal was to provide consistency between the statutes.
Number 0112
REPRESENTATIVE PORTER moved to adopt Amendment 1. Hearing no
objection, it was so adopted.
Number 0122
MS. SLAGLE explained Amendment 2 related to the Department of
Administration. It allowed the calculation of terminal leave
payments to be based on an annualized rate of pay. She called on
Mike McMullen, Department of Administration, to explain the
amendment.
Number 0132
MIKE MCMULLEN, Merit System Personnel Manager, Central Office,
Division of Personnel, Department of Administration, explained
Amendment 2 accomplished three things. It first changed the method
by which terminal leave was paid off. The language it repealed had
been around since statehood. It was interpreted to include a
holiday paid during the period in question. Through the collective
bargaining agreements, the holiday pay for termination had been
eliminated. Therefore, the amendment would take care of those
covered by statute.
Number 0178
CHAIR JAMES wondered if there were any employees currently being
paid this way.
MR. MCMULLEN replied, "yes." The amendment covered the partially
exempt service and exempt service employees.
Number 0199
CHAIR JAMES wondered if there was a fiscal impact.
MR. MCMULLEN replied there was a fiscal impact. He said it was
about .4 percent of 1 percent of the payroll. The funds were
collected as a surcharge on the payroll and placed in the reserve
account. The terminal leave was then paid from the reserve
account. The difference was 100 days of leave in one year compared
to about 300,000 days of leave paid from the general payroll. The
numbers were so small it would appear as a $0 fiscal note.
MR. MCMULLEN said the second change affected the payment of the
terminal leave. It deleted the installment over a period of time.
MR. MCMULLEN said the third change included AS 39.20.250(b) as part
of the repealer. Paragraph (b) required an employee to repay the
balance of the leave pay, if an employee were to return to work.
The option already existed so there was not a need for the
provision to remain in statute.
Number 0376
CHAIR JAMES wondered about the employees not part of the collective
bargaining units.
Number 0382
MR. MCMULLEN replied, for the employees outside of a collective
bargaining unit, the leave regulation cash-in was provided.
Number 0388
CHAIR JAMES asked if the division had been implementing whatever
was in a collective bargaining agreement?
Number 0392
MR. MCMULLEN replied many things in collective bargaining had been
adopted as regulations for all employees.
Number 0405
CHAIR JAMES stated even though it was in violation of statute.
Number 0417
MR. MCMULLEN replied the Department of Law reviewed all regulations
before adopting them.
Number 0428
CHAIR JAMES commented a person could not take a terminal leave
payment and return until it was used.
MR. MCMULLEN stated, a person did have to repay a terminal leave
balance, if it was a substantial amount, upon an employee returning
to work. That payback requirement was being eliminated.
CHAIR JAMES cited an example whereby an employee cashed a six week
leave balance. She wondered what happened when an employee came
back to work after three weeks, according to current policy.
Number 0449
MR. MCMULLEN stated the employees covered by statute would be
required to payback three weeks of that cashed out leave balance.
The state would then return the three weeks of leave to the books.
If the period crossed the calendar year, tax implications were
involved.
Number 0503
CHAIR JAMES stated an employee could cash the leave balance and
remain working, therefore, being paid twice for the same time.
MR. MCMULLEN replied, "yes." It was a correct statement as phrased.
Am employee could be paid for working and accumulated leave during
the same period of time. He further said it was an advantage to
the state in the long-term to have a leave cash-in program at the
current rate. Otherwise an increase or promotional amount would be
calculated.
Number 0548
CHAIR JAMES said the cost of the program to provide leave would be
more expensive. It became a benefit as apposed to a leave program.
She said that did not happen in the private sector.
Number 0572
MR. MCMULLEN replied there were programs where an employee could
buy leave time or cash-out his leave and work. There were minimum
requirements for time off the job in statute and in the collective
bargaining agreements. He said they were minimal, however.
Number 0603
REPRESENTATIVE PORTER moved to adopt Amendment 2. Hearing no
objection, it was so adopted.
Number 0615
MS. SLAGLE explained Amendment 3 related to the Department of
Commerce and Economic Development and the Department of Revenue.
It allowed the department to collect taxes on insurance premiums
more frequently than on an annual basis. A quarterly basis was
suggested. It would generate more money for the state because the
payments would be received more frequently. She called on Marianne
K. Burke, Department of Commerce and Economic Development.
Number 0652
MARIANNE K. BURKE, Director, Central Office, Division of Insurance,
Department of Commerce and Economic Development, explained
Amendment 3 provided for the more frequent collection of insurance
premiums. The dollar amount was approximately $26 million to $27
million, money that went directly to the general fund. It would
apply to all insurance companies in the state, 1,100. Alaska was
one of the last states to still collect on an annual basis.
Therefore, the insurance companies were set-up to pay the tax on a
more frequent basis. Most states collected on a quarterly basis,
while some states collected on a monthly basis. The amendment also
provided for an electronic means to pay the tax, accelerating the
receipt of the money into the state treasury. The insurance
companies also recognized that Alaska was one of the last states to
move in this direction.
Number 0737
REPRESENTATIVE PORTER asked if Ms. Burke anticipated quarterly
payments.
MS. BURKE replied, "yes."
Number 0744
REPRESENTATIVE PORTER moved to adopt Amendment 3. Hearing no
objection, it was so adopted.
Number 0766
CHAIR JAMES commented Representatives Ivan and Green had to leave
early to attend another meeting. She explained Representative Ivan
presented an amendment. She referred the committee members to page
4, line 6, and explained the amendment inserted "or repeal" after
the word "adopt" in the provision.
Number 0792
REPRESENTATIVE OGAN moved to adopt the conceptual amendment.
Hearing no objection, it was so adopted.
Number 0804
CHAIR JAMES explained Representative Ivan would like an analysis of
all the repealer sections in the bill.
Number 0818
REPRESENTATIVE OGAN suggested a copy be sent to all the committee
members.
Number 0840
JOHN GEORGE, Lobbyist, representing the American Council of Life
Insurance and the National Association of Independent Insurers,
stated the companies he represented were willing to "bite the
bullet" on the taxes incurred due to Amendment 3. The wording,
however, did not specifically state the filing time frame. He
suggested including "not more than quarterly," for clarification.
He would be concerned if it was more often than quarterly.
Number 0892
CHAIR JAMES said she wanted to here from the Administration.
Number 0915
MR. BARTHOLOMEW said the Department of Revenue worked with the
Administration closely on this section. The evidence indicated a
quarterly payment was the intent. He said he did not feel there
would be an objection from the Administration.
Number 0940
CHAIR JAMES commented Representative Porter did ask that question
directly.
Number 0950
REPRESENTATIVE PORTER moved to adopt a conceptual amendment to
include a quarterly provision for the collection of taxes for
clarification. Hearing no objection, it was so adopted.
Number 0983
REPRESENTATIVE PORTER moved that CSHB 415(STA) move from committee
with individual recommendations and attached fiscal notes. Hearing
no objection, it was so moved from the House State Affairs
Committee.
HB 443 - INCREASE MOTOR FUEL TAX
The next order of business to come before the House State Affairs
Committee was HB 443.
CHAIR JAMES called on Sam Kito III, Department of Transportation
and Public Facilities, to present the committee substitute.
Number 1062
SAM S. KITO III, Legislative Liaison/Special Assistant, Office of
the Commissioner, Department of Transportation and Public
Facilities, explained a brief summary of the harbor situation in
the state of Alaska was before the committee members for review.
It showed historical funding from 1989 to the present. He further
explained the revised fiscal note tied the increase in tax to the
dedicated fund allowing the Department to receive the revenue from
the taxes. It was reflected under "maintenance" for the Department
of Transportation and Public Facilities.
Number 1124
CHAIR JAMES wondered how that related to the constitutional
amendment in the House Finance Committee. Did the constitutional
amendment allow the money to be spent on the maintenance of public
facilities?
Number 1132
MR. KITO III replied the constitutional amendment allowed the
spending of revenue from the dedicated fund for maintenance of a
highway system. A definition was offered recently in the House
Finance Committee that stated "maintenance" included any associated
facilities with the highway system.
Number 1168
CHAIR JAMES announced she did not have a written amendment prepared
today. Nonetheless, she suggested an amendment to divide the 14
cents of gas tax into two year implementations - 7 cents one year,
7 cents the next. She called on a committee member to support and
move her amendment.
Number 1218
REPRESENTATIVE PORTER stated previous testimony indicated there was
concern about the jump to 14 cents. The amendment was one approach
to "soften the blow."
Number 1261
REPRESENTATIVE ROBINSON also supported the amendment. It was a
major increase. She believed it was needed, however. She was
confused about the constitutional amendment in the House Finance
Committee and asked for an explanation.
CHAIR JAMES replied the House Finance Committee was working on the
constitutional amendment passed from the House State Affairs
Committee earlier. It was amended to include a marine fuel tax in
the House Transportation Committee. There was concern because the
motor fuel tax would not cover the current cost ($75 million spent,
$21 million brought in), while the marine fuel tax would cover the
current cost ($1 million spent, $7 million brought in). Therefore,
$6 million of existing taxes would be taken from the general fund
to be used for harbors and docks. There was also discussion of
transferring harbors and docks to the local municipalities for
future maintenance. Consequently, CSHB 443(STA) was subject to the
passage of the constitutional amendment.
Number 1426
REPRESENTATIVE PORTER wondered what the mechanism would be to
channel the tax money to the municipalities to maintain the ports.
Number 1455
MR. KITO III replied the increase in the marine motor fuel tax
would be used to offer capital appropriations to upgrade and
transfer facilities. The Department was planning to implement a
sharing program with the localities. The revenue collected by the
legislature into the dedicated fund could be appropriated directly
to the communities. If, at the end of the transfer program the
state decided it was no longer interested in collecting taxes for
the harbors, the tax rate could be lowered by a future legislature.
The intent was to transfer state facilities out-of-state hands.
Number 1525
REPRESENTATIVE PORTER wondered if the immediate intent was to
upgrade the facilities so that they could not be transferred.
Number 1530
MR. KITO III replied, "yes."
Number 1535
CHAIR JAMES wondered if the purpose of the marine fuel tax was to
only fix docks and harbors, or did it also have a general fund
implication. Currently, it did have a general fund implication.
Moreover, she aired her concern of the issue of the fishing vessels
that did not buy their marine fuel tax from Alaska because it could
be bought cheaper from Seattle. She suggested a use tax to help
solve this issue. She announced it was possible to attach language
to address the issue in CSHB 443(STA). She explained to the
committee members that she was going in that direction.
Number 1646
REPRESENTATIVE PORTER moved to adopt the conceptual amendment to
include a two year implementation of the 14 cents gas tax of 7
cents the first year and 7 cents the next year. Hearing no
objection, it was so adopted.
Number 1660
REPRESENTATIVE ROBINSON commented the amendment would change the
fiscal note.
Number 1677
CHAIR JAMES also commented it would change the fiscal note.
Number 1677
CHAIR JAMES suggested deleting Section 5, "TAX REFUND ADJUSTMENT."
The legislature needed to follow the issue further to determine if
more taxes or less taxes were needed.
Number 1726
REPRESENTATIVE OGAN moved to delete Section 5, "TAX AND REFUND
ADJUSTMENT." Hearing no objection, it was so deleted.
CHAIR JAMES announced she was willing to move the bill forward to
the next committee of referral before including the use tax
amendment.
Number 1780
REPRESENTATIVE WILLIS moved that CSHB 443(STA) move from the
committee with individual recommendations and attached fiscal
notes. Hearing no objection, it was so moved from the House State
Affairs Committee.
Number 1832
REPRESENTATIVE OGAN stated he did not object to moving the bill
forward. It was tied to the constitutional amendment and to the
people. He believed every chance should be given to the people to
vote directly on tax issues.
Number 1891
CHAIR JAMES asked the committee members to waive HCR 29 - contest
to name the new ferry - from the House State Affairs Committee. No
objections were voiced.
Number 1990
CHAIR JAMES further announced a tentative presentation was
scheduled for April 2, 1996 on HAARP.
Number 2095
ADJOURNMENT
CHAIR JAMES adjourned the House State Affairs Committee meeting at
9:35 a.m.
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