Legislature(1995 - 1996)
04/11/1996 08:10 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 11, 1996
8:10 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
MEMBERS ABSENT
Representative Ed Willis
COMMITTEE CALENDAR
HOUSE BILL NO. 416
"An Act relating to fees or assessment of costs for certain
services provided by state government, including hearing costs
related to the real estate surety fund; fees for authorization to
operate a postsecondary educational institution or for an agent's
permit to perform services for a postsecondary educational
institution; administrative fees for self-insurers in workers'
compensation; business license fees; fees for activities related to
coastal zone management, training relating to emergency management
response, regulation of pesticides and broadcast chemicals, and
subdivision plans for sewage waste disposal or treatment; and
providing for an effective date."
- PASSED CSHB 416(STA) OUT OF COMMITTEE
HOUSE BILL NO. 482
"An Act relating to state procurement practices and procedures; and
providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 136
"An Act mandating the sale of the Alaska Railroad; and providing
for an effective date."
- WAIVED OUT OF COMMITTEE
HOUSE BILL NO. 198
"An Act relating to absences from the state and eligibility for
permanent fund dividends; and providing for an effective date."
- PASSED CSHB 198(STA) OUT OF COMMITTEE
HOUSE BILL NO. 546
"An Act providing for and relating to the issuance of general
obligation bonds in the amount of $600,211,000 for the purpose of
paying the cost of acquiring, constructing, reconstructing, and
equipping public schools and of repair and major maintenance of
public school and University of Alaska facilities; and providing
for an effective date."
- HEARD AND HELD
* HOUSE BILL NO. 545
"An Act relating to the cost-of-living differential for certain
public employees residing in the state and the criteria for
determining eligibility for the differential; and providing for an
effective date."
- SCHEDULED BUT NOT HEARD
HOUSE JOINT RESOLUTION NO. 34
Proposing an amendment to the Constitution of the State of Alaska
relating to the duration of a regular session.
- SCHEDULED BUT NOT HEARD
(* First public hearing)
PREVIOUS ACTION
BILL: HB 416
SHORT TITLE: OMNIBUS STATE FEES & COST ASSESSMENTS
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
JRN-DATE JRN-PG ACTION
01/12/96 2432 (H) READ THE FIRST TIME - REFERRAL(S)
01/12/96 2432 (H) STATE AFFAIRS, L&C, RESOURCES, FINANCE
01/12/96 2432 (H) 7 FNS (DCED, 2-DEC, 2-GOV, LABOR, MLV)
01/12/96 2432 (H) FISCAL NOTE (REV)
01/12/96 2433 (H) GOVERNOR'S TRANSMITTAL LETTER
04/09/96 (H) STA AT 8:00 AM CAPITOL 102
04/09/96 (H) MINUTE(STA)
04/11/96 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 482
SHORT TITLE: STATE PROCUREMENT PRACTICES & PROCEDURES
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
JRN-DATE JRN-PG ACTION
02/09/96 2686 (H) READ THE FIRST TIME - REFERRAL(S)
02/09/96 2686 (H) L&C, STATE AFFAIRS, FINANCE
02/09/96 2687 (H) 2 FISCAL NOTES (ADM, DOT)
02/09/96 2687 (H) 5 ZERO FNS (2-ADM, DCED, DCRA, CORR)
02/09/96 2687 (H) 5 ZERO FNS (DOE, DEC, F&G, GOV, DHSS)
02/09/96 2687 (H) 5 ZERO FNS (LABOR, LAW, DMVA, DNR, DPS)
02/09/96 2687 (H) 2 ZERO FNS (REV, UA)
02/09/96 2687 (H) GOVERNOR'S TRANSMITTAL LETTER
03/18/96 (H) L&C AT 3:00 PM CAPITOL 17
03/20/96 (H) L&C AT 3:00 PM CAPITOL 17
03/20/96 (H) MINUTE(L&C)
03/22/96 (H) L&C AT 3:00 PM CAPITOL 17
03/28/96 3429 (H) L&C RPT CS(L&C) 1DP 5NR 1AM
03/28/96 3429 (H) DP: KUBINA
03/28/96 3429 (H) NR: KOTT, SANDERS, MASEK, PORTER
03/28/96 3429 (H) NR: ROKEBERG
03/28/96 3429 (H) AM: ELTON
03/28/96 3429 (H) 2 FISCAL NOTES (ADM, DOT) 2/9/96
03/28/96 3430 (H) 4 ZERO FNS (2-ADM, DCED, DCRA) 2/9/96
03/28/96 3430 (H) 4 ZERO FNS (COR, ED, DEC, F&G) 2/9/96
03/28/96 3430 (H) 3 ZERO FNS (GOV, DHSS, LABOR) 2/9/96
03/28/96 3430 (H) 4 ZERO FNS (LAW, MVA, DNR, DPS) 2/9/96
03/28/96 3430 (H) 2 ZERO FNS (REV, UA) 2/9/96
03/28/96 3430 (H) REFERRED TO STA
04/09/96 (H) STA AT 8:00 AM CAPITOL 102
04/09/96 (H) MINUTE(STA)
04/11/96 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 136
SHORT TITLE: MANDATE SALE OF ALASKA RAILROAD
SPONSOR(S): REPRESENTATIVE(S) MARTIN
JRN-DATE JRN-PG ACTION
01/30/95 174 (H) READ THE FIRST TIME - REFERRAL(S)
01/30/95 174 (H) TRA, STA, FIN
04/03/96 (H) TRA AT 1:00 PM CAPITOL 17
04/03/96 (H) MINUTE(TRA)
04/10/96 (H) TRA AT 1:00 PM CAPITOL 17
04/11/96 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 198
SHORT TITLE: PFD ALLOWABLE ABSENCES
SPONSOR(S): REPRESENTATIVE(S) ELTON, Robinson, Davies
JRN-DATE JRN-PG ACTION
02/27/95 487 (H) READ THE FIRST TIME - REFERRAL(S)
02/27/95 487 (H) STATE AFFAIRS, JUDICIARY, FINANCE
03/28/96 (H) STA AT 8:15 AM CAPITOL 102
03/28/96 (H) MINUTE(STA)
04/04/96 (H) STA AT 8:00 AM CAPITOL 102
04/04/96 (H) MINUTE(STA)
04/09/96 (H) STA AT 8:00 AM CAPITOL 102
04/09/96 (H) MINUTE(STA)
04/11/96 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 546
SHORT TITLE: G.O. BONDS: SCHOOLS & UNIV.
SPONSOR(S): STATE AFFAIRS
JRN-DATE JRN-PG ACTION
03/22/96 3270 (H) READ THE FIRST TIME - REFERRAL(S)
03/22/96 3270 (H) STA, HES, FINANCE
03/26/96 (H) STA AT 8:00 AM CAPITOL 102
03/26/96 (H) MINUTE(STA)
04/04/96 (H) STA AT 8:00 AM CAPITOL 102
04/04/96 (H) MINUTE(STA)
04/09/96 (H) STA AT 8:00 AM CAPITOL 102
04/09/96 (H) MINUTE(STA)
04/11/96 (H) STA AT 8:00 AM CAPITOL 102
WITNESS REGISTER
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: Presented HB 416.
PAUL GROSSI, Director
Central Office
Division of Workers' Compensation
Department of Labor
P.O. Box 25512
Juneau, Alaska 99802-5512
Telephone: (907) 465-2790
POSITION STATEMENT: Provided testimony on HB 416.
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 416.
JULES TILESTON, Director
Central Office
Division of Mining and Water Management
Department of Natural Resources
3601 "C" Street, Suite 800
Anchorage, Alaska 99503-5935
Telephone: (907) 762-2163
POSITION STATEMENT: Provided testimony on HB 416.
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 416.
CATHERINE REARDON, Director
Central Office
Division of Occupational Licensing
Department of Commerce and Economic Development
P.O. Box 110806
Juneau, Alaska 99811-0806
Telephone: (907) 465-2534
POSITION STATEMENT: Provided testimony on HB 416.
RICK BROWN, Platting Officer
Matanuska-Susitna Borough
350 Dahlia
Palmer, Alaska 99645
Telephone: (907) 745-4801
POSITION STATEMENT: Provided testimony on HB 416.
DUGAN PETTY, Director
Central Office
Division of General Services
Department of Administration
P.O. Box 110210
Juneau, Alaska 99811-0210
Telephone: (907) 465-2250
POSITION STATEMENT: Presented HB 482.
DAVE GERKE
1265 Norman Street, Number 2
Anchorage, Alaska 99504
Telephone: (907) 337-4657
POSITION STATEMENT: Provided testimony on HB 482.
REPRESENTATIVE KIM ELTON
Alaska State Legislature
State Capitol, Room 112
Juneau, Alaska 99801-1182
Telephone: (907) 465-4947
POSITION STATEMENT: Presented committee substitute for HB 198.
ROSS PERRINE
P.O. Box 4031
Palmer, Alaska 99645
Telephone: (907) 746-6443
POSITION STATEMENT: Provided testimony on HB 198.
NANCI JONES, Director
Central Office
Permanent Fund Dividend Program
Department of Revenue
P.O. Box 110460
Juneau, Alaska 99811-0460
Telephone: (907) 465-2323
POSITION STATEMENT: Provided testimony on HB 198.
GEORGE REICHMAN
P.O. Box 403
Glennallen, Alaska 99588
Telephone: (907) 822-3528
POSITION STATEMENT: Provided testimony on HB 198.
DONALD EVANS, Superintendent
Southwest Region School District
P.O. Box 90
Dillingham, Alaska 99576
Telephone: (907) 842-5287
POSITION STATEMENT: Provided testimony on HB 546.
ACTION NARRATIVE
TAPE 96-49, SIDE A
Number 0015
The House State Affairs Committee was called to order by Chair
Jeannette James at 8:10 a.m. Members present at the call to order
were Representatives Ivan, Ogan, Robinson and James. Members
absent were Representatives Green, Porter and Willis.
The record reflected the arrival of Representative Joe Green at
8:12 a.m.
The record reflected the arrival of Representative Brian Porter at
8:15 a.m.
HB 416 - OMNIBUS STATE FEES & COST ASSESSMENTS
The first order of business to come before the House State Affairs
Committee was HB 416.
CHAIR JEANNETTE JAMES called on Nancy Slagle, Office of the
Governor, to present the bill.
Number 0081
NANCY SLAGLE, Director, Budget Review, Office of Management and
Budget, Office of the Governor, thanked the committee members for
hearing HB 416 again. She stated it was an intricate part of the
Governor's budget plan. The bill provided for the charging of fees
for certain services within state government. She said she would
explain the various sections of the bill and representatives from
the departments were here to answer any questions.
Number 0145
MS. SLAGLE explained Section 1 addressed the real estate surety
fund. It allowed the Department of Commerce and Economic
Development (DCED) to charge for the cost of a claim hearing for
the real estate surety fund. It also allowed the state to free
some general fund dollars. It was a small amount, however. The
section was also supported by the industry.
Number 0197
REPRESENTATIVE JOE GREEN asked Ms. Slagle if Section 1 impacted the
problems with the dedicated funds adversely?
Number 0206
MS. SLAGLE replied, "no." Section 1 allowed the DCED to charge the
cost of the hearing against the surety fund. It was not dedicated
for a specific purpose. In the past the ability did not exist for
the department.
Number 0247
REPRESENTATIVE GREEN said other revenue enhancing fees could not be
dedicated. The money was put into the general fund and then
budgeted back out. Section 1 sounded like a specific dedicated
fund.
Number 0286
MS. SLAGLE replied Section 1 actually broadened the purpose of the
fund.
REPRESENTATIVE GREEN asked Ms. Slagle if the fund would have to be
budgeted annually?
MS. SLAGLE replied, "yes."
Number 0299
CHAIR JAMES asked Ms. Slagle where the fund came from?
Number 0305
MS. SLAGLE replied a representative from the department was here to
answer that question.
CHAIR JAMES suggested moving forward instead. She would ask the
question again later.
Number 0316
MS. SLAGLE moving forward, explained Section 2 allowed the Alaska
Commission on Postsecondary Education (ACPE) to charge fees for
processing educational institutions' applications for authorization
to operate, along with application fees for the institutions' agent
permits.
Number 0393
CHAIR JAMES asked Ms. Slagle where the money for the ACPE came
from?
Number 0410
MS. SLAGLE replied a large portion of its' budget came from the
loan processing, the student loan portion of the corporation. The
principle interest that was generated from the revolving loan funds
was used to support the corporation. Section 2 would allow the
commission to charge a fee for the other portion of its
responsibility so that a corporate receipt would not be used.
Number 0466
CHAIR JAMES asked Ms. Slagle if the ACPE would collect fees from
the University of Alaska?
Number 0476
MS. SLAGLE replied, "no." It would collect fees from other private
types of institutions, such as, vocational schools. It did not
affect postsecondary education.
Number 0511
CHAIR JAMES said she was concerned about moving the money from one
hand to the other. She stated, if a fee was going to be charged,
it should generate new money.
MS. SLAGLE agreed with Chair James. She explained Section 2 would
be a new fee for the state.
Number 0539
MS. SLAGLE moving forward, explained Section 3 would authorize the
State Commission for Human Rights to establish and charge fees for
education, training services, information, and materials the
commission provided to the public.
Number 0592
CHAIR JAMES asked Ms. Slagle if this was new money?
MS. SLAGLE replied, "yes."
CHAIR JAMES wondered if the fee for a training service would apply
to a state agency.
Number 0618
MS. SLAGLE replied the section did not apply to services provided
to another state agency. This applied to the private industry
only.
Number 0632
REPRESENTATIVE CAREN ROBINSON said the State Commission for Human
Rights just came to Juneau for a two day training for the Juneau
Economic Development Council that brought together several private
businesses. She further stated she knew the commission provided
several weeks of training for the Marine Highway System employees.
She was not sure if the commission should not charge state
agencies. She understood, however, it was directed at the private
industry that demanded days of training, when at this point the
only expense covered was travel.
Number 0677
CHAIR JAMES replied the transfer of money from one account to
another did not help the state gain anything.
Number 0709
REPRESENTATIVE ROBINSON replied she agreed with Chair James.
However, she also believed it was fair to help support the cost of
the staff person absent for long training periods.
Number 0744
CHAIR JAMES said she understood the transfer of authority across
state agency lines. However, HB 416 was intended to produce
revenue. Furthermore, it was also a budget decision. The
legislature needed to determine if it wanted to fund agencies that
provided these types of services.
MS. SLAGLE said the budget process did allow for transfers between
agencies.
CHAIR JAMES said she understood the concept of the transfer between
agencies. She reiterated it was part of the budget process and
should be dealt with there and not in HB 416.
Number 0862
MS. SLAGLE moving forward, explained Section 4 would establish an
administrative fee for self-insured employers under the Alaska
Workers' Compensation Act. Most employers currently paid a portion
of the cost of running the state workers' compensation program
through their insurance premium tax. Self-insured employers,
however, were receiving the same state services but were not
currently contributing to the cost of running the system. The
section would provide for a share in that cost.
Number 0921
REPRESENTATIVE BRIAN PORTER asked Ms. Slagle if Section 4 would
include municipalities?
Number 0930
MS. SLAGLE replied, as written, "yes." It would also include
private firms and school districts.
Number 0949
REPRESENTATIVE PORTER asked Ms. Slagle if she had a figure amount
for the municipalities?
Number 0958
MS. SLAGLE replied it dropped approximately $300,000. She called
on Paul Grossi, Department of Labor, to address the issue further.
Number 0991
PAUL GROSSI, Director, Central Office, Division of Workers'
Compensation, Department of Labor, referred the committee members
to a handout titled, "1994 Self-insured WC Payments at 4% by Year."
He explained the companies would have paid the amount in the second
column.
Number 1050
REPRESENTATIVE PORTER said, therefore, the budget for the
Municipality of Anchorage would be affected by about $86,000.
Number 1055
MR. GROSSI replied, "right." It would fluctuate from year to year,
however, because it depended on the amount of claims processed.
Number 1066
CHAIR JAMES said these are big numbers. She asked Ms. Slagle to
continue.
Number 1074
MS. SLAGLE moving forward, explained Section 5 would change the
biennial fee for a business license from $50 to $75. This would
mark the first fee increase since statehood.
Number 1112
CHAIR JAMES said that was a narrow increase. Furthermore, the
House State Affairs Committee discussed earlier surrounding another
piece of legislation the Department of Commerce and Economic
Development should provide more information to individuals that
applied for a business license. She suggested thinking about the
amount further. She was not sure if $75 was enough. It depended
on the services provided, however.
Number 1192
MS. SLAGLE moving forward, explained Section 6 would provide the
Division of Governmental Coordination in the Office of the Governor
to adopt regulations to charge for services related to federal
consistency determinations and certifications under the Coastal
Zone Management Act. The fees charged were intended to speed up
the process.
Number 1261
REPRESENTATIVE GREEN said any industry in an effort to help move
that would favor Section 6. He asked Ms. Slagle, if the language
on page 3, line 15, "may adopt regulations to charge fees for
services provided," would go beyond the cost of the permit? For
example, if there were 10 permits, could the division divide its
total operating cost by one-tenth, and charge that amount.
Number 1311
MS. SLAGLE replied, "I guess if you were really stretching it, you
probably could." It was not the intent of HB 416, however.
MS. SLAGLE moving forward, explained Section 7 would authorize the
Department of Military and Veterans' Affairs to adopt regulations
setting reasonable fees for classes and seminars on emergency
response procedures. The department right now could charge fees
for spill response training only. She explained the fee charged
would be small. It would only cover the cost of transportation or
meeting facilities, for example.
Number 1368
MS. SLAGLE moving forward, explained Section 8 would authorize the
Department of Environmental Conservation (DEC) to adopt regulations
setting fees for the regulation of pesticides and broad case
chemicals and for the review of subdivision plans for sewage waste
disposal or treatment. The fees would provide funding for the
technical staff employed to provide those services.
Number 1405
REPRESENTATIVE IVAN IVAN asked if the DEC currently had technical
staff on board, or did it contract those services?
Number 1425
MS. SLAGLE said Janice Adair, Department of Environmental
Conservation, was available via teleconference to answer that
question.
Number 1436
JANICE ADAIR, Director, Division of Environmental Health,
Department of Environmental Conservation, said Section 8 would
provide funds for existing staff and services. It would replace
general fund money as indicated in the fiscal note.
Number 1451
REPRESENTATIVE SCOTT OGAN said HB 416 allowed taxation through
regulation. He suggested reducing regulations and called for a
vote of the people.
Number 1517
MS. SLAGLE replied regulations were adopted to respond to and to
implement laws. Furthermore, the Administration was looking at
streamlining regulations. She cited the bill that recently passed
out of the House State Affairs Committee that addressed this issue.
Number 1557
CHAIR JAMES said she agreed with the concerns of Representative
Ogan. The legislature also played a part in this concern as the
law making body of the government. Regulations were used to
implement statutes, and statutes needed to be changed. The budget
process was also a big concern of hers. She agreed with reducing
state spending, but suggested looking at the services first to
determine which ones werereally needed.
CHAIR JAMES announced she was disappointed that no one from the
public or the industry was here to testify today on HB 416. She
was concerned about the reaction of the public. She wondered if
anybody even knew about the bill.
Number 1654
REPRESENTATIVE IVAN said he concurred with Representative Ogan's
view of HB 416 as taxation by regulation. He was further concerned
about the consumers not having an opportunity to question the
amount. There was a public hearing process, if the fees were
adopted by statute. He believed that was a better process.
Number 1684
CHAIR JAMES replied there was a public process outlined in the
Administrative Procedures Act (APA). However, the public was not
aware usually until after they "paid the bill." Therefore, it was
a responsibility of the legislature to help "tune in the public."
She was thankful for Gavel-to-Gavel and the exposure it provided to
inform more people.
Number 1728
REPRESENTATIVE ROBINSON said, if this was an issue for everybody,
she suggested notifying the different groups that would be affected
through the House State Affairs Committee. Furthermore, she also
believed this issue was a policy decision that the legislature
needed to address. The legislature needed to decide if a business
license was necessary, for example. If it decided that a license
was necessary, then it needed to ensure that the cost of providing
that service was funded through the license fee.
Number 1789
REPRESENTATIVE OGAN said he was not willing to make a policy
decision to give the authority to regulators to tax. He felt it
was inappropriate. If a tax was needed, he suggested letting the
people vote on it. He reiterated he did not want to give a
regulatory agency the authority to tax. He said, "I think we all
know what will happen."
Number 1818
MS. SLAGLE stated several of the provisions in the bill were set by
statute at a specific amount. Furthermore, the bill was trying to
cover the cost of providing a service. In most instances the
consumer was willing to pay more to insure that he received the
services expected from the state. This was especially true of the
boards and commissions.
Number 1878
CHAIR JAMES said there was a difference, however, for the
municipalities as their municipal assistance and revenue sharing
were cut and their fees were increased. That was where the most
complaints would come from. She cited the coastal zone management
issue. She believed the users would be willing to give some money
to get it done. The performance would have to match the fee,
however.
Number 1930
MS. SLAGLE explained there were two amendments that needed to be
presented. The first dealt with the Department of Natural
Resources (DNR). The second dealt with the Department of
Transportation and Public Facilities. She announced there were
representatives from each department to answer any questions.
MS. SLAGLE explained Amendment 1 allowed the DNR to charge a fee
for the direct cost of evaluating or auditing an application for
the exploration credits for mine development.
Number 2032
CHAIR JAMES said a fee that was established by DNR in 1993 or 1994
was very distressing to her constituents. She explained her
constituents wanted to fill a ditch on wetlands. They could not
fill it without a $500 application fee. The ditch still existed
because they believed the application fee was too much. It was not
worth it. This was what made people hate government.
Number 2125
JULES TILESTON, Director, Central Office, Division of Mining and
Water Management, Department of Natural Resources, said the
proposed amendment had the support of the industry including the
fees. Furthermore, the amendment would allow the Commissioner to
review and approve applications.
Number 2221
REPRESENTATIVE ROBINSON asked if this was the same amendment that
Representative Richard Foster proposed for the underground mining
bill on the floor of the House of Representatives?
Number 2231
MR. TILESTON replied, "that's affirmative."
Number 2234
REPRESENTATIVE OGAN said he wanted to hear directly from the
industry that it supported the amendment and the fees. He
suggested another hearing.
Number 2266
MS. SLAGLE explained Amendment 2 allowed the Department of
Transportation and Public Facilities to charge for the use of state
marine or harbor facilities, and required municipalities that lease
them to charge a comparable fee. It would not generate money for
the state, but it would generate more money for the municipalities.
Number 2296
SAM KITO III, Legislative Liaison/Special Assistant, Office of the
Commissioner, Department of Transportation and Public Facilities,
stated the proposed amendment was part of a bill the department
introduced several years ago. He explained the state of Alaska
owned close to 100 harbors and had operating agreements with 84 of
those harbors and residing municipalities. The agreements required
the municipalities to recover the cost associated with the
operation of the harbor while the state of Alaska was responsible
for the deferred maintenance. The deferred maintenance
responsibility was approaching $26 million, however. Therefore,
the amendment would permit the department to require a municipality
to take into account the replacement cost when charging a user fee,
and to direct that money into a separate account to allow the
municipalities to take care of the deferred maintenance themselves.
The department did not see another method without an increase in
the fuel tax or a dedication of the fuel tax to take care of this
deferred maintenance problem.
Number 2354
REPRESENTATIVE GREEN said he had a problem with the language. He
read, "At minimum, the fees may not be less than...." He called it
a blank check.
Number 2372
MR. KITO III replied there was a minimum charge per lineal foot of
moorage space, about $2 per foot, per year. However, some
municipalities had not reached that level. The department
encouraged them to reach that level in order to recover some of
their operating costs. Otherwise, they were subsidized by the
local municipality to operate that harbor. Furthermore, the
department did not have the authority to ask a municipality to
charge more to take care of the deferred maintenance. Therefore,
the amendment would help alleviate some of the deferred maintenance
concerns of the department. There were many facilities that were
in dire need of work to adequately perform for the public.
Number 2419
REPRESENTATIVE GREEN wondered if the minimum would be enough to
offset the deferred maintenance.
Number 2448
MR. KITO III replied a minimum existed now that was not enough to
take care of the deferred maintenance needs. The amendment would
give the department the authority to request that the
municipalities charge more for the moorage rate so that they could
recover the maintenance and replacement cost of the harbor
facility.
Number 2464
REPRESENTATIVE PORTER wondered if the state was responsible for the
deferred maintenance.
MR. KITO III replied, "yes." The state was responsible through
contract for the deferred maintenance of the facilities.
Number 2474
REPRESENTATIVE PORTER said he wondered what mechanism would shift
the responsibility from the state to the municipality. He realized
it would be through the contract based on Mr. Kito's response.
Number 2477
CHAIR JAMES said the deferred maintenance problem for the
Department of Transportation and Public Facilities was an example
of the deferred maintenance problem for the state.
TAPE 96-49, SIDE B
Number 0000
CHAIR JAMES further said everyone agreed and recognized that on-
going maintenance and repairs were needed, but the cost was
considered too high. In some cases something new was built instead
of dealing with the deferred maintenance. The issue was not being
addressed. She was not sure if the amendment would solve the
problem, however. It would solve a little bit of the problem, but
not the big problem.
Number 0032
MR. KITO III said Chair James was correct. The deferred
maintenance was increasing. The department had not been built a
new facility since 1983, however.
CHAIR JAMES said she understood that the department had not built
a new facility while the old had not been taken care of. That was
not the case statewide, however.
Number 0049
REPRESENTATIVE GREEN said he was still concerned that the fee would
not be confined to maintenance. He cited the University of Alaska
included maintenance in its' budget but never actually used the
money for maintenance. He wondered if there was any assurance that
a municipality would use the fees accordingly.
Number 0078
MR. KITO III replied he was not sure if the department could
mandate a municipality to use the money for a certain purpose. It
was a statutory requirement that the revenue collected be used for
harbors. A provision would be included in the contract that the
state of Alaska would no longer be responsible for the cost
associated with the replacement of a facility. The municipality
would then be responsible for the replacement cost. Therefore, if
it used that money for something else, it could not rely on the
state for money.
Number 0110
REPRESENTATIVE GREEN replied he did no see that written anywhere in
the bill. If that was the intent of the amendment, he agreed with
it.
Number 0116
MR. KITO III said it would be taken care of in the contract
language between the state and the municipality. The department
did not think it would be necessary to include it in the statute.
REPRESENTATIVE GREEN said he did not want to leave it to chance.
Number 0130
CHAIR JAMES stated the controversial bill that Representative Carl
Moses introduced to raise the marine fuel tax was vetoed by the
Governor last year. It was vetoed because it was only a small fix
to the overall problem. She believed it was happening again this
session. A piece-meal fix was not the solution to this problem.
The state continued to make excuses. It needed to prioritize its
assets before expanding or buying new services.
Number 0200
CHAIR JAMES said she wanted to hear from the municipalities and the
industry before taking any action on this bill.
Number 0211
REPRESENTATIVE PORTER said he agreed with Chair James, but it was
very late in the session. The bill had several committees of
referral. Therefore, there was ample time to alert the
municipalities and the industry through the rest of the legislative
process.
Number 0239
CHAIR JAMES agreed it was late in the session. However, if the
issue was important enough, it could be waived from a committee,
for example.
CHAIR JAMES called on Catherine Reardon, Department of Commerce and
Economic Development, to the table. She asked her what the
attitude was regarding the cost of the business license. She
further wanted to know what type of information was being sent to
individuals that applied for a business license that explained
their responsibilities as a license holder.
Number 0271
CATHERINE REARDON, Director, Central Office, Division of
Occupational Licensing, Department of Commerce and Economic
Development, explained the business license fee generated revenue
above and beyond the cost of administering the program. She called
it a revenue generator for the state. The increase was not
intended to offset increased cost, but to increase revenue. She
cited the revenue for FY 95 was $1,873,000 while the cost for
administering the program was $346,000. Therefore, the net gain to
the general fund was $1,527,000. The state did provide services to
businesses through other divisions that were funded from the
general fund. She cited tourism as an example. Moreover, the
division included a newsletter this time when it sent the business
license renewal form. It was an opportunity to share information.
Number 0446
CHAIR JAMES said she was concerned about the penalty for not having
an additional business license for certain types of activities.
Number 500
MS. REARDON replied that information was mentioned on the business
license application form now.
CHAIR JAMES said that information was especially needed for new
applicants.
Number 0513
REPRESENTATIVE ROBINSON said she liked the idea of moving from a
one year to a two year process.
Number 0523
MS. REARDON explained the division moved to a two year license
process several years ago. Currently, the cost was $50 every two
years of which one-half of the renewals were processed each year.
Number 0539
REPRESENTATIVE ROBINSON wondered why a business license was needed
every two years. She asked, why not five years, for example?
Number 0548
MS. REARDON said that was a choice the legislature would have to
make because it was a revenue generating program. The cost would
be higher for a five year program to cover the longer time span.
The fewer times the department had to process the paperwork, the
less the administrative cost, however.
Number 0587
CHAIR JAMES said many companies did not stay in business for five
years. She envisioned the businesses would want a refund causing
more problems for the division.
CHAIR JAMES called on the first witness via teleconference in Mat-
Su, Rick Brown.
Number 0626
RICK BROWN, Platting Officer, Matanuska-Susitna Borough, said he
was concerned about the ability of the DEC to continue to provide
the services that seemed to get short funded every year. The
Wasilla field office did a good job given the staff numbers. If it
would not continue to be funded, it needed the ability to offset
that loss through fees. He said he liked the wording in Sec. 8,
provision (a), and as it pertained to provision (9), "subdivision
plans for sewage waste disposal or treatment submitted under AS
46.03.090." He reiterated something needed to be done to help the
department and the Wasilla field office.
Number 0721
CHAIR JAMES asked Ms. Adair what were the expected charges for
reviewing a subdivision?
Number 0733
MS. ADAIR replied the fiscal note was based on $250 per
subdivision. She said AS 37.10.050 required an agency to set a fee
at a level that covered the cost, unless otherwise authorized by
the legislature. Currently, the municipality fee was $350.
Number 0774
CHAIR JAMES asked for a motion to adopt the amendments.
Number 0781
REPRESENTATIVE PORTER moved to adopt Amendment 1 as Section 11.
Hearing no objection, it was so adopted.
Number 0825
REPRESENTATIVE GREEN moved to adopt Amendment 2 with changes. He
moved to change the word "the" to "all" on page 1, line 3, Sec.
35.10.121. He wanted the fee to be used accordingly. The change
was supported by the department. It still gave it flexibility.
Hearing no objection, it was so adopted.
Number 0922
REPRESENTATIVE PORTER moved to insert the language, "and political
subdivisions of the state" after the language "except the State of
Alaska," on page 2, line 25. Hearing no objection, it was so
inserted. (Amendment 3)
Number 0992
REPRESENTATIVE ROBINSON said she did not object to the amendment
proposed by Representative Porter, but wanted to hear further from
the state. She said not all municipalities were self-insured.
Therefore, the ones that were self-insured were already paying.
The bill would put everyone on an equal foot.
Number 1045
REPRESENTATIVE PORTER replied self-insured municipalities were
paying their own fees and claims. They were not avoiding a
payment. The state, however, was not taking a portion of it.
Number 1072
CHAIR JAMES said transferring money did not solve the overall
problem for the state.
Number 1155
REPRESENTATIVE OGAN asked Chair James if she was going to take any
action on this bill today?
Number 1166
CHAIR JAMES replied she was willing to move it out of the committee
today. She did not know if she would vote in favor of the bill.
She was willing to move it forward in the legislative process,
however.
Number 1176
REPRESENTATIVE OGAN said this was a policy issue as well.
Furthermore, he believed there was a fourth power of government,
the taxing authority of the agencies, and the bill further provided
that power. The bureaucrats argued it was more efficient. He
reiterated the bill further delegated the authority to let the
bureaucrats tax. He felt it was inappropriate.
Number 1244
CHAIR JAMES said she agreed with most of what Representative Ogan
said. She was willing to move the bill forward, however.
Number 1253
REPRESENTATIVE PORTER moved that CSHB 416(STA) am move from the
committee with individual recommendations and attached fiscal
notes. Representative Ogan objected. A roll call vote was taken.
Representatives James, Green, Ivan, and Porter voted in favor of
the motion. Representative Ogan voted against the motion. The
bill moved from the House State Affairs Committee.
HB 482 - STATE PROCUREMENT PRACTICES & PROCEDURES
The next order of business to come before the House State Affairs
Committee was CSHB 482(L&C).
CHAIR JAMES called on Dugan Petty, Department of Administration, to
present the bill.
Number 1370
DUGAN PETTY, Director, Central Office, Division of General
Services, Department of Administration, explained at the end of the
last session a federal law was passed, the Procurement Acquisition
Streamlining Act of 1994. The Act incorporated a number of reforms
that the federal government was making to streamline its
procurement practices. The same was asked of the state. The
business climate was changing and the procurement area needed to be
changed as well. He said reform was "on the horizon." In Alaska,
the state recognized it did not have the resources to continue
doing business as in the past. Therefore, Commissioner Mark Boyer,
Department of Administration asked that the state improve its
procurement practices. A Procurement Advisory Council was formed.
The council consisted of private practitioners, vendors, university
members, stake holders and state practitioners. The council was an
on-going initiative. The council would continue to look at the
regulations, policies and practices. It also wanted to look at the
procedures and practices on a situational basis to see if they
could be re-engineered to work better. House Bill 482, therefore,
was a result of the work of the council. He proceeded to explain
the various sections of the bill.
Number 1591
MR. PETTY explained Sections 3 and 37 allowed the Commissioner of
Administration to remove a vender that had been disbarred or
suspended from the current list of bidders.
MR. PETTY moving forward, explained Sections 4 and 22 allowed for
a more simplified acquisition process for small leases. Small
leases were identified as those that were 3,000 square feet (s.f.)
or less.
Number 1639
MR. PETTY moving forward, explained Section 5 allowed for an
extension of leases for up to 10 years provided that lease had at
least 6 months remaining. It would also allow for a rent
concession of at least 15 percent, or 10 percent with Americans
with Disabilities Act (ADA) compliances.
Number 1664
MR. PETTY moving forward, explained Sections 6 and 7 provided the
state with the ability to perform a lease-purchase acquisition of
real property without notifying the legislature in the event the
total amount of the payment was $500,000 or less, or the total
amount was under $2,500,000.
Number 1698
MR. PETTY moving forward, explained Sections 8 and 12 allowed for
the identification of the subcontractors within 5 days of the award
for non-construction procurement.
Number 1749
REPRESENTATIVE OGAN said based on personal experience as a
contractor, general contractors "bid shop" amongst the
subcontractors if they were not required to report within a short
time frame. He questioned if this was a good practice. He said it
opened the possibility for unscrupulous business practices amongst
contractors.
Number 1806
CHAIR JAMES asked Mr. Petty to explain if that provision addressed
the concerns of Representative Ogan.
Number 1810
MR. PETTY replied the section was not intended to change that
provision as it related to construction contracts. The provision
of the five day report requirement remained as such. The practice
was not problematic for the service and supply industry. The
council was concerned about the definition of a "supplier" and
"subcontractor." Upon examination, there was not a bid shop
problem amongst the service and supply industry, but it was a
problem for the construction industry.
REPRESENTATIVE OGAN said, "thank you. That clarified it."
Number 1891
MR. PETTY moving forward, explained Section 9 allowed for a
procurement officer to shorten the circulation period in a bid or
proposal. Currently, only the chief procurement officer or the
Commissioner of Transportation and Public Facilities for
construction bids, could reduce the period.
Number 1953
MR. PETTY moving forward, explained Section 10 required the bidder,
if it was to maintain the Alaska bidders' preference, to maintain
its place of business for at least six months. The section was to
prevent the state from paying the difference upon review of a lower
bidder and not receiving a value in return. The council determined
that was not the intent of the bidders' preference and suggested
the change.
Number 2066
REPRESENTATIVE OGAN asked Mr. Petty to explain the six months
provision in Section 10. He wondered if one year had been
considered because that was the determinate for state residency.
Number 2091
MR. PETTY said the companion bill to HB 482 in the Senate addressed
this issue. He said it would take up to 12 months for a business
to take advantage of the Alaska bidders' preference. Therefore,
six months was reasonable. It was also written as six months in
statute.
Number 2165
MR. PETTY moving forward, explained Section 11 empowered the
procurement officer to determine to use a request for proposal
(RFP) in lieu of an invitation to bid (ITB) as opposed to the chief
procurement officer. The council believed the more frequent use of
an RFP provided better value.
Number 2203
MR. PETTY moving forward, explained Section 13 was a housekeeping
measure. The current law required that the contents of a proposal
were not disclosed during the negotiations. Section 13 changed it
so that they were not disclosed prior to the notice of intent to
award period.
Number 2265
MR. PETTY moving forward, explained Section 14 was also a
housekeeping measure. He explained when an RFP was cancelled the
proposals could be accessed under the Freedom of Information Act,
thereby, exposing competitor proposals to one another. The section
would require the state to maintain a list of proposals if an RFP
was cancelled, and to return them back to the bidder.
Number 2317
MR. PETTY moving forward, explained Section 15 allowed the
contracting officer to state the amount on whatever page was
appropriate in the contract instead of the current mandate
requiring the amount on the first page.
Number 2350
MR. PETTY moving forward, explained Section 16 was a significant
change in statute. A single-source contract could be entered into
when the chief procurement officer, or for construction, the
Commissioner of the Department of Transportation and Public
Facilities, determined in writing that an award through a bid of
RFP was not practical. The officer could award it to a single-
source if it was in the interest of the state.
Number 2434
CHAIR JAMES said she had a problem with Section 16. She referred
the committee members to page 9, line 1, and read, "competitive
sealed bidding, competitive sealed proposals, or other competition
in accordance with regulations adopted by the commissioner." She
felt the language was too broad and loose.
TAPE 96-50, SIDE A
Number 0000
CHAIR JAMES announced the companion bill in the Senate added a
subsection (e) to Section 16. She read, "except for procurement of
supply services or professional services or construction that do
not exceed the amount for small procurement under AS 36.30.320(a)
that's applicable. The authority to make the determination
required by this section may not be delegated even if the authority
to contract is delegated under AS 36.30.015(a)." She explained it
was a decision that would have to be made by the commissioner. The
addition was an attempt to tighten the language. She was not
comfortable with a single-source purchase because it distressed the
public. She announced she would like to delete Section 16
altogether.
Number 0192
MR. PETTY replied the companion bill in the Senate was amended to
consider the concerns regarding the delegation, accountability and
control to remain with the chief procurement officer, or the
Commissioner of the Department of Transportation and Public
Facilities. The added section to the Senate bill that Chair James
read resolved those concerns. This area took a tremendous amount
of time from the state and many of the requirements were an
overkill. Therefore, the council wanted the chief procurement
officer to make a reasonable determination to prevent an overkill
effort.
Number 0357
MR. PETTY moving forward, explained Section 17 would allow for
limited competition procurement without putting out an invitation
to bid or an RFP. That determination would be made by the chief
procurement officer, or the Attorney General for legal service
contracts.
Number 0439
MR. PETTY moving forward, explained Section 19 permitted the use of
an innovative procurement as a method of source selection for new,
unique requirements, new technology, or to achieve the best value
after the chief procurement officer or the Commissioner of the
Department of Transportation and Public Facilitates, determined the
method was advantageous to the state and the Department of Law
approved the procurement plan. He cited the Exxon Valdez Oil Spill
Trustee Council typically wanted to use the RFP bid process by
notifying the public. The RFP rules did not require that in
statute. Therefore, the council was asking for the ability to use
an innovative methodology subject to the public notice
requirements.
Number 0593
MR. PETTY moving forward, explained Section 21 expanded the
requirement to independently examine the material facts to any
state official when making a determination for an alternate
procurement. The section gave the accountability to the person in
authority. If a person knowing made a false statement, he or she
would be guilty of a class A misdemeanor.
Number 0648
MR. PETTY moving forward, explained Section 22 expanded the minimum
threshold for a formal invitation to bid to $50,000 for services
and supplies, to $100,000 for construction, and to 3,000 s.f. for
leases.
Number 0702
MR. PETTY moving forward, explained Section 27 required that
records of innovative procurement be kept and be made available by
the Department of Administration.
Number 0723
MR. PETTY moving forward, explained Section 28 applied the two
tiered protest process to all procurement except small ones. The
Commissioner of the Department of Administration was permitted to
establish a simplified procedure for protests of small procurement.
Number 0774
MR. PETTY moving forward, explained Section 29 allowed for the
protest of a solicitation to be filed 10 days before a bid or RFP
opening, unless the bid or RFP provided for a shorter period.
There was concern in the House Labor and Commerce Committee and the
Senate that this could abridge a bidder from his right to protest.
That was not the intent, however. If a pre-bid or pre-proposal
conference was held within 12 days of a bid opening, a protest
could only be filed only prior to the bid opening to prevent new
information being presented without the ability to protest.
Number 0875
MR. PETTY moving forward, explained Sections 30, 31, 33 and 34
affected the response to a protest days. The sections set the days
at 10, 15 and 30. The sections clarified the current statutes.
Number 0897
MR. PETTY moving forward, explained Section 32 limited a
protestor's damage to reasonable bid or proposal preparation costs.
Number 0924
MR. PETTY moving forward, explained Sections 35 and 36 established
a statute of limitations to bring a claim against the state. The
claim must be brought within 90 days after the contractor became
aware of the claim or knew the basis of the claim. Lessors must
also bring a claim regarding Consumer Price Index (CPI) rent
adjustments within the terms of the lease. The restriction,
however, did not limit a contractor's right under a disputed
billing timely payment according to AS 36.05.285.
Number 0962
MR. PETTY moving forward, explained Sections 38 and 39 added some
exemptions. Section 38 exempted the operation and protection of
assets or disposal of assets through the Agricultural Loan Program
acquired by the Department of Natural Resources.
Number 1009
CHAIR JAMES said she did not have a problem if the state did not
operate under the procurement code when operating a facility. She
did have a problem, however, if the state wanted to sell a
facility. If the state wanted to sell a facility, it should
operate under the principles of competitiveness.
Number 1043
MR. PETTY replied as the bill read it would allow for the disposal
of equipment and supplies acquired by the Department of Natural
Resources to not be subject to the procurement code.
Number 1058
CHAIR JAMES asked Mr. Petty if the disposal would be recognized as
an on-going expense of a business or a liquidation? She believed
an on-going expense would not have to go through this process. She
was not willing to exempt a liquidation, however.
Number 1093
MR. PETTY replied a liquidation would not be subject to the
procurement code. The concern of Chair James was well founded .
Number 1109
CHAIR JAMES suggested adding additional language to indicate the
distinction between on-going business activity and liquidation.
Number 1149
MR. PETTY wondered if Chair James was concerned about the
liquidation of certain assets by the state and their subject to the
procurement code. He stated the section would support her
concerns.
Number 1181
CHAIR JAMES said she would look at the provision further. She said
it was hard to distinguish between a liquidation and an on-going
business asset. She did not want to extend that provision, or it
would defeat the leniency given.
Number 1200
MR. PETTY said he understood the concerns of Chair James. He said
the procurement code and the regulations for disposal were
primarily aimed at personal property and acquisition of supplies
and services which did not fit the picture of the disposal of an
asset. Furthermore, the bill addressing the railroad disposal, for
example, specifically made the disposal not subject to the
procurement code. The reason was due to broad considerations that
the procurement code had not focused on. He would talk to the
Department of Natural Resources about this issue further.
Number 1249
CHAIR JAMES said in the absence of following the procurement code,
specific language should be included to explain the process.
MR. PETTY said the public deserved an accountable process.
CHAIR JAMES said she would consider the provisions further. She
asked Mr. Petty to continue explaining the sections.
Number 1277
MR. PETTY moving forward, explained Section 39 exempted the
livestock purchased by the Alaska Correctional Industries from the
procurement code.
Number 1301
CHAIR JAMES said it did not work when conducting ordinary business.
It only worked in the case of protecting the public from the
government purchase of goods and services.
MR. PETTY agreed with Chair James.
Number 1315
MR. PETTY moving forward, explained Section 40 allowed for General
Services Administration, Federal Supply Schedules (GSA) supply
schedules to open to state and local governments in accordance with
regulations established by the Commissioner of the Department of
Administration and as provided for in the federal law. The
schedules offered more favorable prices for the state. The current
law provided for that, but the council wanted to clarify the intent
in statute.
Number 1358
CHAIR JAMES asked Mr. Petty the status of the companion bill in the
Senate (SB 275)?
Number 1367
MR. PETTY replied it passed out of the Senate State Affairs
Committee and was now in the Senate Judiciary Committee.
Number 1387
REPRESENTATIVE ROBINSON announced she had to leave to attend a
caucus meeting.
Number 1399
REPRESENTATIVE OGAN asked Mr. Petty, if the state was able to
purchase through the GSA, would that eliminate instate businesses?
Number 1413
MR. PETTY said it was not clear that this would happen at the
federal level. There was a moratorium surrounding this provision
in the statute. It was not clear if the moratorium would be
lifted, however. If it was lifted, the department would act as the
gatekeeper for the Division of General Services. The intent was to
use the contracts within the state when a dealer could give GSA
prices.
Number 1469
REPRESENTATIVE GREEN asked Mr. Petty to further explain Sections 4
and 22, and Sections 6 and 7. He asked what was the current cost
for rental space?
Number 1499
MR. PETTY replied it was approximately $1.35 to $1.50 per s.f.
There were rents as high as $5 to $6 per s.f. in Barrow, for
example. At the other end there were rents as low as 70 cents to
80 cents per square foot.
Number 1525
REPRESENTATIVE GREEN asked Mr. Petty how the 3,000 s.f. or the
$500,000 was arrived at in Section 4 and Section 6?
Number 1542
MR. PETTY replied the $500,000 was the current threshold
requirement in AS 36.30.80 to bring an operating lease to the
legislature for approval. The 3,000 s.f. made more sense than a
dollar amount because of fluctuations. The council recommended
5,000 s.f. initially. It was reduced to 3,000 s.f. in the House
Labor and Commerce Committee.
Number 1589
REPRESENTATIVE GREEN said he was concerned that those two
provisions together would give latitude for the state to enter into
a "healthy" contract.
Number 1602
CHAIR JAMES said she was not interested in the state entering into
any lease-purchase agreement without legislative approval no matter
how small. It was necessary to consider the obligation of the
state in the future regarding maintenance, for example.
Number 1634
MR. PETTY replied any decision made on a lease-purchase agreement
needed to consider the cost of operation and maintenance of the
facility. It was built into the formula. If it did not make sense
to own a building considering the operation cost, then the state
should be leasing it.
Number 1663
CHAIR JAMES said she understood what Mr. Petty said. However,
deferred maintenance had not been funded. Therefore, it behooved
the legislature to consider the obligation by approving this
provision. She reiterated that the legislature did not have a
future plan to deal with the deferred maintenance of public
facilities. She suggested as a solution that the state sell and
lease back all of the public facilities.
Number 1707
REPRESENTATIVE GREEN asked Mr. Petty to explain Section 9 further.
He said it opened the avenue for the "good ole boy." He was
concerned that the length of time could be shortened to favor
someone.
Number 1734
MR. PETTY replied that clearly was not the intend of Section 9.
The current requirement was 21 days no matter what, unless the
chief procurement office determined it needed to be changed. He
said 10 days were the typical length of time needed, leaving 11
days left for the process. The language "advantageous to the state
and adequate competition" was added to insure competition within
the amount of time necessary.
Number 1791
CHAIR JAMES called for a five minute break.
Number 1801
CHAIR JAMES called the House State Affairs Committee meeting back
to order. Representatives Ogan, Porter, Green and James were
present.
CHAIR JAMES called on the first witness via teleconference in
Anchorage, Dave Gerke.
Number 1829
The record reflected the testimony of Dave Gerke was inaudible at
times due to interference.
DAVE GERKE said he had been an Alaskan resident for over 20 years.
He was disabled. He expressed his opposition to HB 482 because it
would not be good for Alaska. He specifically opposed Section 10
addressing Alaska bidders' preference. He stated it would hinder
a lot of people with disabilities and was discriminatory against
those trying to get into procurement with the state. He further
opposed Section 16 addressing a single-source contract. He
reiterated the bill was bad for Alaskan companies except for a few
bureaucrats in Juneau. He suggested the committee members take a
look at the provisions further before taking any action.
Number 2061
CHAIR JAMES explained to Mr. Gerke the six months requirement was
added to prevent the establishment of a company to obtain the bid.
That was unfair to established businesses.
Number 2115
MR. GERKE replied Section 10 would not affect his business that
much. He was concerned about future disabled companies, however.
Number 2135
CHAIR JAMES thanked Mr. Gerke for his testimony. She called on
further discussion from the committee members.
CHAIR JAMES announced she did not plan to move the bill out of the
committee today.
Number 2144
REPRESENTATIVE OGAN said he was distressed last year to pass bills
that exempted various quasi private organizations from the
procurement process. He had stated many times that there was a
problem with the procurement process. Therefore, he applauded the
efforts of Mr. Petty and the council. The bill needed further
work, but he agreed with the concept of it.
Number 2197
CHAIR JAMES thanked Mr. Petty for his time and explanation of the
bill today.
HB 136 - MANDATE SALE OF ALASKA RAILROAD
The next order of business to come before the House State Affairs
Committee was HB 136.
CHAIR JAMES announced she wanted to waive the bill forward to the
next committee of referral - the House Finance Committee.
CHAIR JAMES explained there was an identical bill moving forward in
the Senate. The Senate bill would probably be the bill that House
of Representatives would consider.
CHAIR JAMES asked if there was an objection to waive the bill from
the committee. Hearing no objection, it was so waived from the
House State Affairs Committee.
HB 198 - PFD ALLOWABLE ABSENCES
The next order of business to come before the House State Affairs
Committee was CSHB 198(STA) (9-LS0745/C).
CHAIR JAMES called on Representative Kim Elton, to present the
committee substitute.
Number 2349
REPRESENTATIVE KIM ELTON explained the changes to the committee
substitute. He referred the committee members to page 2, line 20,
and explained item (J) was added. The item was added to allow an
absence for the care of a parent, spouse, sibling, child, or
stepchild with a critical life-threatening illness whose treatment
required travel outside of the state. The language was also
included in the title to avoid the "christmas tree" effect. He
thanked the staff members and the committee members for their time
spent on the bill.
CHAIR JAMES announced she was ready to move the bill forward.
Number 2408
REPRESENTATIVE PORTER explained the committee substitute precluded
a resident from taking care of a relative who resided outside of
Alaska.
Number 2424
REPRESENTATIVE PORTER moved that CSHB 198(STA) move from the
committee with individual recommendations and attached fiscal
notes. Representative Ogan objected for further testimony from the
public and to offer an amendment.
CHAIR JAMES called on the first witness via teleconference in Mat-
Su, Ross Perrine.
Number 2439
ROSS PERRINE said he was a merchant seaman and had lived in Alaska
for the past 10 years. He had been consistently denied the
permanent fund dividend (PFD). He felt his work as a merchant
seaman should be considered an allowable absence. It was not a
question of residency.
TAPE 96-50, SIDE B
Number 0000
MR. PERRINE further said his work was vital to Alaska as a direct
participant in the moving of Alaskan Northslope Oil. He reiterated
he felt he was being excluded from the PFD program because of his
occupation. He said it was not intentional on the part of the
program, but an accidental result when defining the allowable
absences. The majority of Alaskans he had talked to also felt his
situation was unfair.
Number 0033
CHAIR JAMES asked Mr. Perrine how long at a time was he gone?
Number 0037
MR. PERRINE replied anywhere from two to three months. He also
received six weeks of leave when he was at home before returning to
the sea.
CHAIR JAMES called on Nanci Jones, Department of Revenue, to
address the concerns of Mr. Perrine.
Number 0062
NANCI JONES, Director, Central Office, Permanent Fund Dividend
Division, Department of Revenue, stated there were many inequities
in the allowable absences for the PFD. She said, "I am asking the
legislature to deal with the inequities regarding the absences."
The program did not recognize the private industry. The current
allowable absences were for congressional delegation, and state
employees, for example. She reiterated there were no provisions
for the private industry. She called it a discrimination and an
inequity against the other half of the Alaskan residents that had
careers that required them to be outside of the state. She was
trying to bring more balance and equity between the allowable
absences. She asked the committee members to recall her previous
testimony warning them that when considering this issue there were
many areas to consider.
Number 0121
REPRESENTATIVE GREEN said he knew of a constituent that was an
airline pilot that was out of the state for approximately 190 days.
There were inequities, but he did not know if the legislature
should continue to make exceptions. "Sooner or later, we say it
doesn't matter anymore. If you want the Alaska Permanent Fund,
just come here and stay for a little while."
Number 0143
CHAIR JAMES explained she asked Representative Elton to keep the
title tight to prevent the christmas tree effect. She believed the
serious considerations of a terminally ill family members needed to
be addressed. Therefore, she was willing to consider the bill in
the House State Affairs Committee. She agreed with the concerns of
Ms. Jones regarding the inequities for allowable absences. She
said she would yield to the department for suggestions. She
suggested a bill next session to clean up the problems. The
current program did not designate the difference between long-time
Alaskans and those that have been here a short time. The courts,
however, had ruled that it was not legal to consider the tenure of
a long-time Alaskan resident. She suggested as a solution to take
away all the exceptions. That would be fair, she said, rather than
including only a few exceptions for some. She reiterated she
empathized with Mr. Perrine's concerns. She was not willing to
consider his profession as an exemption in the bill, however.
Number 0255
REPRESENTATIVE OGAN moved to include "U.S. Merchant Marines" to
page 2, line 24, item (K), and to amend the title accordingly.
Representative Green objected. Discussion followed.
Number 0279
REPRESENTATIVE OGAN said he understood the concerns of the
christmas tree effect. He said it was late in the game to consider
this issue and would consider working on it further next session.
He said a disqualification based on a person's career was not fair.
Number 0305
CHAIR JAMES replied she agreed with Representative Ogan. However,
she did not think this was the correct piece of legislation to
include that amendment. The bill would never pass.
Number 0315
REPRESENTATIVE GREEN said he could not pass the bill in good
conscience without including "Airline Pilot" as an allowable
absence.
Number 0319
CHAIR JAMES reiterated she wanted to maintain the integrity of the
bill and to only address the concerns of terminally ill family
members.
CHAIR JAMES called for a roll call vote. Representatives James,
Green, Ivan and Porter voted against the motion. Representative
Ogan voted in favor of the motion. The amendment failed.
CHAIR JAMES called on the next witness via teleconference in
Glennallen, George Reichman.
Number 0354
GEORGE REICHMAN said he had been a missionary worker in Alaska
since 1975. As a result of his job he was required to leave Alaska
every four years to meet with individuals and churches that
financially supported his work. He wondered why it was not
included as an allowable absence since it was a requirement of his
job. His family could use the money because his children were
about ready to go to college. He said it would be easy to document
his time away from Alaska and show the intent of his family to
return. He felt he and his family were being excluded unfairly.
Number 0426
CHAIR JAMES thanked Mr. Reichman for his testimony. She reiterated
a serious look at the allowable absences was needed.
CHAIR JAMES called on a motion to move the bill from the committee.
Number 0443
REPRESENTATIVE OGAN moved that CSHB 198(STA) (9-LS0745/F) be
adopted for consideration. Hearing no objection, it was so
adopted.
Number 0462
REPRESENTATIVE GREEN moved that the word "or" be deleted from page
2, line 14. Hearing no objection, it was so deleted. (Amendment
1)
Number 0528
REPRESENTATIVE PORTER moved that CSHB 198(STA) am move from the
committee with individual recommendations and attached fiscal
notes. Hearing no objection, it was so moved from the House State
Affairs Committee.
HB 546 - G.O. BONDS: SCHOOLS & UNIV.
The next order of business to come before the House State Affairs
Committee was HB 546.
The record reflected the return of Representative Robinson at 10:45
a.m.
CHAIR JAMES announced she wanted to form a subcommittee to further
address HB 546.
CHAIR JAMES called on the first witness via teleconference in
Dillingham, Donald Evans.
Number 0586
DONALD EVANS, Superintendent, Southwest Region School District,
read the following statement into the record.
"I would like to thank the committee for the opportunity to speak
in support of HB 546.
"I believe that it is imperative that the Alaska State Legislature,
together with the Governor's administration, take responsible, and
timely action to address the overwhelming and growing need for
school facility maintenance and construction within our state.
That need, while it is not limited to, is no more evident nor is
the need greater, than in unorganized areas of the state served by
REAA school districts.
"HB 546, proposes the use of G.O. Bonds to address those needs. HB
546 represents a viable and practical method for the State and the
Alaska State Legislature to meet their responsibility.
"For several years, the Southwest Region School District has been
in need of, and has requested the support of the state in
replacement, or remodel of three facilities. The District has
annually placed the Togiak School Replacement as its highest
capital improvement priority.
"The existing Togiak School serves 197 elementary and high school
students. The original structure was constructed in 1958 by Bureau
of Indian Affairs and later transferred to the State of Alaska. A
permanent addition to the structure was added in the 1970's. Since
that time, several portable classrooms have been added. In fact
more than 60% of the student population of the Togiak School are
served in portable classrooms. For years now, the children and
parents of Togiak have trusted that this was only temporary, and
that the capital improvement process would correct the unhoused
student conditions. The Southwest Region School District had
applied and continues to apply through the Department of
Education's CIP process.
"The School District and the Community of Togiak have worked
together to prepare for the funding, when it is made available.
The Togiak Natives Ltd. corporation along with the city of Togiak
has donated 40 acres of land for a new school site. The Southwest
Region School District has completed initial site survey and
educational specification work.
"For the 1995-96 school year, the Togiak School is ranked number 7
on the Department of Education CIP priority list. The Departments
recognition of the need in Togiak sprank hope, but only until the
Governor's Budget called for funding of the number 1 construction
priority.
"Also for the 1995-96 school year, the Southwest Region School
District initiated a major maintenance request for the Koliganek
School. As a result of continuing structural problems the District
sought and received engineering reports on the building. Repeated
roof & wall separations, building shifts, and ground water flooding
experienced annually at the school was found to be from an improper
foundation, design and construction. The engineering solution
calls for repairs and corrections that will cost approximately
$800,000. Just this month, in the Koliganek School snow drifted 15
inches deep in one room, due to a wall separation that has occurred
just since summer. I wonder how the State could not find the
$800,000 to save a $6,000,000 school before it is not able to be
saved. This project is currently ranked number 20 on the major
maintenance list and is not scheduled for funding this year.
"I am aware that the needs of the Southwest Region School District
are not unique throughout the State, but this merely makes the
current situation more critical. To suffer under the belief and
practice that by taking care of a few needs at the top of an (at
best) arbitrary list, and carrying on with business as usual,
constitutes burying the State head in the sand. Inadequately
addressing the capitol needs of schools in Alaska, is ignoring the
real and growing State responsibility to the children. Not acting
on HB 546, and continually resting on the rhetoric that there isn't
the money, and therefore there are no solutions, is a cop out.
"HB 546 offers a solution and I believe that failure to pursue this
solution would be irresponsible management of the States existing
property, and an extreme injustice to the children of Alaska.
"I ask that you support HB 546, and pass it out of committee today.
"Thank you for your time and the opportunity to speak."
Number 0821
CHAIR JAMES thanked Mr. Evans for his testimony. She announced the
bill would pass out of the House State Affairs Committee today.
She reiterated a subcommittee had been formed to draft additional
language.
Number 0837
REPRESENTATIVE OGAN suggested the committee look at the legal
opinion of Tamara Cook, Legislative Legal and Research Services.
He explained the opinion indicated the bill was possibly
unconstitutional.
Number 0865
CHAIR JAMES said the opinion suggested contacting the Bond Council
to verify the constitutionality. She contacted the council and it
indicated it was not a problem.
Number 0884
REPRESENTATIVE IVAN asked Chair James what her intention was for HB
546.
CHAIR JAMES explained the subcommittee would draft some changes to
accept the new division by senate districts. The subcommittee
members consisted of Representatives Ivan, Robinson, Green, Ogan
and James.
Number 1060
ADJOURNMENT
CHAIR JAMES adjourned the House State Affairs Committee meeting at
11:05 a.m.
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