Legislature(1997 - 1998)
04/17/1997 08:05 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 17, 1997
8:05 a.m.
MEMBERS PRESENT
Representative Jeannette James, Chair
Representative Ethan Berkowitz
Representative Fred Dyson
Representative Kim Elton
Representative Ivan Ivan
Representative Al Vezey
MEMBERS ABSENT
Representative Mark Hodgins
COMMITTEE CALENDAR
HOUSE BILL NO. 188
"An Act relating to calculation of compensation for the public
employees' retirement system."
- HEARD AND HELD
HOUSE BILL NO. 79
"An Act relating to the offense of possession of tobacco by a
person under 19 years of age."
- MOVED CSHB 79(STA) OUT OF COMMITTEE
SENATE CONCURRENT RESOLUTION NO. 7
Relating to the thirty-first annual Boys' State.
- MOVED SCR 7 OUT OF COMMITTEE
SENATE CONCURRENT RESOLUTION NO. 8
Relating to the twenty-ninth annual Girls' State.
- MOVED SCR 8 OUT OF COMMITTEE
CS FOR SENATE BILL NO. 68(FIN)
"An Act relating to the Task Force on Privatization; and providing
for an effective date."
- HEARD AND HELD
(* First public hearing)
PREVIOUS ACTION
BILL: HB 188
SHORT TITLE: DEFINITION OF COMPENSATION IN PERS
SPONSOR(S): REPRESENTATIVE(S) COWDERY
JRN-DATE JRN-PG ACTION
03/12/97 640 (H) READ THE FIRST TIME - REFERRAL(S)
03/12/97 640 (H) STATE AFFAIRS, FINANCE
04/08/97 (H) STA AT 8:00 AM CAPITOL 102
04/08/97 (H) MINUTE(STA)
04/10/97 (H) MINUTE(STA)
04/17/97 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 79
SHORT TITLE: MINOR IN POSSESSION OF TOBACCO
SPONSOR(S): REPRESENTATIVE(S) BUNDE, James
JRN-DATE JRN-PG ACTION
01/16/97 90 (H) READ THE FIRST TIME - REFERRAL(S)
01/16/97 90 (H) STA, JUDICIARY, FINANCE
04/03/97 (H) STA AT 8:00 AM CAPITOL 102
04/03/97 (H) MINUTE(STA)
04/03/97 978 (H) COSPONSOR(S): JAMES
04/08/97 (H) STA AT 8:00 AM CAPITOL 102
04/08/97 (H) MINUTE(STA)
04/17/97 (H) STA AT 8:00 AM CAPITOL 102
BILL: SCR 7
SHORT TITLE: THIRTY-FIRST ANNUAL BOYS' STATE
SPONSOR(S): SENATOR(S) LEMAN, Pearce, Phillips; REPRESENTATIVE(S)
Grussendorf
JRN-DATE JRN-PG ACTION
03/11/97 672 (S) READ THE FIRST TIME - REFERRAL(S)
03/11/97 672 (S) STATE AFFAIRS
03/18/97 (S) STA AT 3:30 PM BELTZ ROOM 211
03/18/97 (S) MINUTE(STA)
03/19/97 778 (S) STA RPT 4DP
03/19/97 778 (S) DP: GREEN, DUNCAN, MACKIE, WARD
03/19/97 778 (S) ZERO FISCAL NOTE (S.STA)
03/21/97 (S) RLS AT 10:45 AM FAHRENKAMP RM 203
03/21/97 (S) MINUTE(RLS)
03/21/97 802 (S) RULES TO CALENDAR AND DP2 3/21/97
03/21/97 807 (S) READ THE SECOND TIME
03/21/97 807 (S) PASSED Y15 N- E4 A1
03/21/97 810 (S) TRANSMITTED TO (H)
03/24/97 800 (H) READ THE FIRST TIME - REFERRAL(S)
03/24/97 800 (H) STATE AFFAIRS
03/24/97 819 (H) CROSS SPONSOR(S): GRUSSENDORF
04/17/97 (H) STA AT 8:00 AM CAPITOL 102
BILL: SCR 8
SHORT TITLE: TWENTY-NINTH ANNUAL GIRLS' STATE
SPONSOR(S): SENATOR(S) LEMAN, Pearce, Phillips; REPRESENTATIVE(S)
Grussendorf
JRN-DATE JRN-PG ACTION
03/11/97 672 (S) READ THE FIRST TIME - REFERRAL(S)
03/11/97 672 (S) STATE AFFAIRS
03/18/97 (S) STA AT 3:30 PM BELTZ ROOM 211
03/18/97 (S) MINUTE(STA)
03/19/97 779 (S) STA RPT 4DP
03/19/97 779 (S) DP: GREEN, DUNCAN, MACKIE, WARD
03/19/97 779 (S) ZERO FISCAL NOTE (S.STA)
03/21/97 (S) RLS AT 10:45 AM FAHRENKAMP RM 203
03/21/97 (S) MINUTE(RLS)
03/21/97 803 (S) RULES TO CALENDAR AND 2DP 3/21/97
03/21/97 808 (S) READ THE SECOND TIME
03/21/97 808 (S) PASSED Y15 N- E4 A1
03/21/97 810 (S) TRANSMITTED TO (H)
03/24/97 800 (H) READ THE FIRST TIME - REFERRAL(S)
03/24/97 800 (H) STATE AFFAIRS
03/24/97 820 (H) CROSS SPONSOR(S): GRUSSENDORF
04/17/97 (H) STA AT 8:00 AM CAPITOL 102
BILL: CSSB 68(FIN)
SHORT TITLE: TASK FORCE ON PRIVATIZATION
SPONSOR(S): SENATOR(S) WARD, Wilken
JRN-DATE JRN-PG ACTION
01/30/97 172 (S) READ THE FIRST TIME - REFERRAL(S)
01/30/97 172 (S) STA, FIN
01/31/97 194 (S) STA WAIVED PUBLIC HEARING NOTICE,RULE23
02/06/97 (S) STA AT 3:30 PM BELTZ ROOM 211
02/06/97 (S) MINUTE(STA)
02/11/97 (S) STA AT 3:30 PM BELTZ ROOM 211
02/13/97 (S) STA AT 3:30 PM BELTZ ROOM 211
02/13/97 (S) MINUTE(STA)
02/18/97 392 (S) STA RPT CS 3DP 2NR SAME TITLE
02/18/97 392 (S) DP: GREEN,WARD,MILLER; NR:
MACKIE,DUNCAN
03/06/97 (S) FIN AT 9:00 AM SENATE FINANCE 532
03/21/97 (S) FIN AT 9:00 AM SENATE FINANCE 532
03/21/97 (S) MINUTE(FIN)
03/21/97 (S) MINUTE(FIN)
03/25/97 (S) FIN AT 9:00 AM SENATE FINANCE 532
03/25/97 (S) MINUTE(FIN)
03/25/97 (S) MINUTE(FIN)
03/26/97 872 (S) INDETERMINATE FN TO STA CS (GOV/OMB)
03/26/97 872 (S) FIN RPT CS 2DP 5NR SAME TITLE
03/26/97 872 (S) DP: SHARP, DONLEY; NR: PEARCE,
03/26/97 872 (S) NR: PHILLIPS, ADAMS, TORGERSON, PARNELL
03/26/97 872 (S) FN TO CS (LAA)
03/26/97 872 (S) INDETERMINATE FN TO FIN CS (GOV/ADM)
03/26/97 872 (S) PREVIOUS IND FN APPLIES TO CS (GOV/OMB)
03/27/97 (S) RLS AT 10:45 AM FAHRENKAMP RM 203
04/02/97 934 (S) RULES TO CALENDAR AND 1NR 4/2/97
04/02/97 935 (S) READ THE SECOND TIME
04/02/97 935 (S) FIN CS ADOPTED UNAN CONSENT
04/02/97 936 (S) AM NO 1 OFFERED BY DUNCAN
04/02/97 936 (S) AM NO 1 FAILED Y6 N13 A1
04/02/97 936 (S) ADVANCED TO THIRD READING UNAN CONSENT
04/02/97 936 (S) READ THE THIRD TIME CSSB 68(FIN)
04/02/97 937 (S) PASSED Y14 N5 A1
04/02/97 937 (S) EFFECTIVE DATE(S) SAME AS PASSAGE
04/02/97 937 (S) DUNCAN NOTICE OF RECONSIDERATION
04/03/97 964 (S) RECON TAKEN UP - IN THIRD READING
04/03/97 965 (S) PASSED ON RECONSIDERATION Y15 N5
04/03/97 965 (S) EFFECTIVE DATE(S) SAME AS PASSAGE
04/03/97 966 (S) TRANSMITTED TO (H)
04/04/97 983 (H) READ THE FIRST TIME - REFERRAL(S)
04/04/97 984 (H) STATE AFFAIRS, FINANCE
04/17/97 (H) STA AT 8:00 AM CAPITOL 102
WITNESS REGISTER
TIM ROGERS, Legislative Program Coordinator
Municipality of Anchorage
P.O. Box 196650
Anchorage, Alaska 99519
Telephone: (907) 343-4467
POSITION STATEMENT: Provided testimony in support of HB 188.
FRANK SMITH
P.O. Box 1199
Barrow, Alaska 99723
Telephone: (907) 852-4983
POSITION STATEMENT: Provided testimony in opposition to HB 188.
Provided testimony on SB 68.
PATRICIA SWENSON, Legislative Assistant
to Representative Con Bunde
State Capitol, Room 104
Juneau, Alaska 99801-1182
Telephone: (907) 465-4843
POSITION STATEMENT: Provided committee substitute.
LOREN JONES, Director
Division of Alcoholism and Drug Abuse
Department of Health and Social Services
P.O. Box 110607
Juneau, Alaska 99811-0607
Telephone: (907) 465-2071
POSITION STATEMENT: Provided testimony on CSHB 79(STA).
JENNIFER STRICKLER, Administrative Officer
Division of Occupational Licensing
Department of Commerce and Economic Development
P.O. Box 110806
Juneau, Alaska 99811-0806
Telephone: (907) 465-2144
POSITION STATEMENT: Provided testimony on CSHB 79(STA).
LOIS IRVIN
167 West Bayview Avenue
Homer, Alaska 99603
Telephone: (907) 235-7172
POSITION STATEMENT: Provided testimony on HB 79.
LORALI MEIER, Intern
to Senator Loren Leman
State Capitol, Room 113
Juneau, Alaska 99891-1182
Telephone: (907) 465-2095
POSITION STATEMENT: Provided sponsor statement for SCR 7 and 8.
SENATOR JERRY WARD
Alaska State Legislature
State Capitol, Room 423
Juneau, Alaska 99801-1182
Telephone: (907) 465-4940
POSITION STATEMENT: Sponsor of SB 68.
JAMES BALDWIN, Assistant Attorney General
Governmental Affairs Section
Civil Division
Department of Law
P.O. Box 110300
Juneau, Alaska 99811-0300
Telephone: (907) 465-3600
POSITION STATEMENT: Provided testimony in opposition to SB 68.
MIKE McMULLEN, Personnel Manager
Division of Personnel
Department of Administration
P.O. Box 110201
Juneau, Alaska 99811-0201
Telephone: (907) 465-4431
POSITION STATEMENT: Provided testimony on SB 68.
PAMELA LaBOLLE, President
Alaska State Chamber of Commerce
217 Second Street, Suite 201
Juneau, Alaska 99801
Telephone: (907) 586-2323
POSITION STATEMENT: Provided testimony in support of SB 68.
ACTION NARRATIVE
TAPE 97-45, SIDE A
Number 0001
The House State Affairs Standing Committee was called to order by
Chair Jeannette James at 8:05 a.m. Members present at the call to
order were Representatives James, Berkowitz, Dyson, Elton, Ivan and
Vezey. Members absent were Hodgins.
HB 188 - DEFINITION OF COMPENSATION IN PERS
The first order of business to come before the House State Affairs
Standing Committee was HB 188, "An Act relating to calculation of
compensation for the public employees' retirement system."
Number 0081
CHAIR JEANNETTE JAMES explained that the public testimony was
closed at the last meeting. She would open it up again so that the
Municipality of Anchorage could testify. There would not be any
action taken on the bill today, however, other than testimony.
Number 0119
TIM ROGERS, Legislative Program Coordinator, Municipality of
Anchorage, was the first person to testify via teleconference in
Anchorage. He thanked Representative Cowdery for introducing the
bill on behalf of the municipality. It could save the municipality
and the state a tremendous amount of money in the long run. It was
also a safety issue and concern for an officer who worked 1,500
hours of overtime. The municipality had a certain amount of
control to reduce the amount of overtime. He cited recently the
police officers were put on a five-day week, eight hour shift; and
were taken off of a four-day week, ten hour shift, saving money in
overtime. More police officers were put on the streets as well.
However, a lot of the overtime was out of our control. For
example, several hundreds of thousands of dollars were spent on
overtime fighting the Millers Reach fire. It was clearly not a
municipal issue; and was out of our control, but it had to be done.
In conclusion, the municipality supported the passage of HB 188.
Number 0329
FRANK SMITH was the next person to testify via teleconference in
Barrow. He was concerned because the legislature had short funded
many state departments which were not able to fill positions. This
left current workers subject to serious overtime to make up for the
short fall. Therefore, removing overtime from the retirement
system removed one more incentive to not fill the empty positions.
He was opposed to the bill
Number 0442
CHAIR JAMES announced the public testimony was closed again for HB
188. The bill would be taken up again at a later date yet to be
determined.
HB 79 - MINOR IN POSSESSION OF TOBACCO
The next order of business to come before the House State Affairs
Standing Committee was HB 79, "An Act relating to the offense of
possession of tobacco by a person under 19 years of age."
Number 0477
PATRICIA SWENSON, Legislative Assistant to Representative Con
Bunde, explained the committee substitute (0-LS0348/P, Chenoweth,
4/16/97).
MS. SWENSON explained Section 1 added language to prevent the
business license endorsement owner, employee, or agent from being
charged with a violation of selling or giving tobacco to a minor if
the person showed proper identification. The new language was
included under AS 11.76 to allow for enforcement by local
authorities. Similar language was also included on page 7-8 in AS
43.70.075. The requirement of a person to sign a statement of age
was dropped in the section. The intent was basically: no
identification, no sale. It would not let the retailer off the
hook in any way. The language concerning an employee in a break
room was deleted in this section also.
MS. SWENSON explained Sec. 2 addressed the issue of single
cigarettes. It was renamed to "Unlawful sale of products
containing tobacco." It made the unlawful sale an offense
punishable upon conviction of a fine of $300. In addition, the
Department of Commerce and Economic Development (DCED) could act
with an administrative hearing to suspend or revoke an endorsement.
The offenses chargeable were the following: to sell cigarettes
that were not in their original package, to sell cigarettes in a
package of less than 20, to sell cigarettes that did not display a
warning, to sell cigarettes without assuring that they were kept in
a secure place, to sell cigarettes in a store that failed to post
the warning sign, or to sell cigarettes to a person under 19 years
of age. The section also made it an offense to present false
identification.
MS. SWENSON explained Sec. 3 renamed Sec. 11.76.105 to "Possession
of tobacco by a person under 19 years of age." It also removed the
ability of a minor to posses tobacco while in an adult correctional
facility. It clarified the amount of the fine for a minor in
possession of tobacco at $300.
MS. SWENSON explained Sec. 4 made the failure to supervise a
cigarette vending machine an offense with criminal negligence.
MS. SWENSON explained Sec. 5 remained the same.
MS. SWENSON explained Sec. 6 added the language "or from developing
tobacco-related education programs." as part of the anti-exemption
provision so that the local government would not be preempted from
adding other access programs.
MS. SWENSON explained Sec. 8 combined Sec. 7,8,9,10 and 11 of the
last committee substitute. The changes were under AS 43.70
requiring each owner to have a separate business license
endorsement for each establishment that sold cigarettes. It also
allowed the DCED to refuse a license to an establishment that had
a suspended or revoked endorsement. The intent was to prevent an
owner from changing the name of his establishment upon revocation
then turning around and getting a new endorsement under the new
name. It also allowed for the revocation of a business license
endorsement without an administrative hearing when the owner had
been convicted of a regulation violation. It also allowed for the
signing of a statement of age instead of showing identification.
MS. SWENSON explained Sec. 9 gave the department the ability to
suspend or revoke a license without an administrative hearing upon
conviction.
MS. SWENSON explained Sec. 11 allowed the legislature to
appropriate money from the increased business license endorsement
fee for enforcement.
MS. SWENSON explained Sec. 12 granted the department the authority
to adopt regulations to determine and collect the fees imposed.
Number 0943
REPRESENTATIVE IVAN IVAN commented that he represented a lot of
small communities. He asked Ms. Swenson how the training provision
in the bill would be executed?
Number 0978
MS. SWENSON replied the department indicated it would set up a
correspondence type training.
Number 1001
REPRESENTATIVE KIM ELTON asked Ms. Swenson if a new fiscal note had
been requested from the Department of Commerce and Economic
Development?
MS. SWENSON replied, "Yes." There was a department member here who
could speak to the new fiscal note. It would end up being a wash.
Number 1040
CHAIR JAMES asked Ms. Swenson if there was a penalty in the bill
for kids caught selling cigarettes to other kids?
MS. SWENSON replied the major thrust of the bill was aimed at the
retailer for accountability rather than the minor. She did not
know if anything like that could be added at this time.
Number 1088
REPRESENTATIVE FRED DYSON commented Alaska law already spoke to the
issue. He shared a story about a cop busting a kid for selling
single cigarettes for $1.
Number 1115
REPRESENTATIVE ETHAN BERKOWITZ commented that Sec. 2 covered the
issue as well. He read, "(a) A person commits the offense of
unlawful sale of products containing tobacco if the person (1)
sells cigarettes (A) that are not in their original, unopened
package or container obtained from the distributor;"
MS. SWENSON commented it was a crime to begin with for a minor to
possess cigarettes.
Number 1136
REPRESENTATIVE ELTON asked Ms. Swenson if there was a prohibition
on municipalities from establishing a tobacco tax now?
MS. SWENSON replied, "No." But often tobacco companies enter at
the local level and try to preempt their ability.
Number 1174
LOREN JONES, Director, Division of Alcoholism and Drug Abuse,
Department of Health and Social Services, was the first person to
testify in Juneau. The committee substitute addressed a lot of the
concerns of the department. The bill was a very important part of
the enforcement package as a whole.
Number 1232
REPRESENTATIVE IVAN asked Mr. Jones how the department planned to
execute the training portion?
Number 1245
MR. JONES replied, according to the DCED, it would establish a
mechanism so that the course could be taken without leaving the
area to address the concerns of the rural areas. It would be
addressed further in the regulations.
Number 1275
JENNIFER STRICKLER, Administrative Officer, Division of
Occupational Licensing, Department of Commerce and Economic
Development, was the next person to testify in Juneau. The
committee substitute she announced satisfied the concerns of the
department. The changes would create a fiscal impact. A draft
fiscal note was pending the adoption of the committee substitute.
CHAIR JAMES asked Ms. Strickler if the fiscal note would be neutral
as the sponsor indicated?
MS. STRICKLER replied, "Yes." The fiscal note indicated a little
extra because the increased fees covered the cost of the training
course. The extra could be used towards enforcement.
Number 1367
LOIS IRVIN was the first person to testify via teleconference in
Homer. She did not have the committee substitute before her so she
did not have any idea what the discussion was about. It was
interesting, however.
CHAIR JAMES announced she would fax the committee substitute to
her.
MS. IRVIN said she would like to review it.
CHAIR JAMES asked that Ms. Irvin review the committee substitute
and direct any questions to the sponsor.
Number 1476
REPRESENTATIVE DYSON asked Mr. Jones how the world would change for
a responsible distributor as a result of the bill? In other words,
a distributor that did not have a vending machine and the products
were kept in a secured place.
Number 1506
MR. JONES replied there were four significant changes. They were
as followed: An employer would have to make his employees aware of
the law; employees would have to go through a refresher course of
the laws every couple of years; identification would be asked for
more often; and the cost would go up for business. There were a
lot of responsible people who already asked for identification.
REPRESENTATIVE DYSON asked how much would the cost of business go
up?
MR. JONES replied from $25 to $100 for a single site. A multiple
employer of 5 sites the cost would go from $25 to $500, for
example.
Number 1567
REPRESENTATIVE DYSON asked Mr. Jones how the bill would affect the
business environment of tobacco type establishments?
Number 1576
MR. JONES replied he did not frequent tobacco type shops so he did
not know. The areas of change that he mentioned earlier would
probably apply as well as the display of the tobacco products so
that only a sales person could have access to them.
Number 1618
REPRESENTATIVE DYSON asked Mr. Jones, if the shop would have to
keep the items behind the counter, if it precluded those under the
age of 19 from entering?
Number 1629
MR. JONES replied he was not sure.
Number 1635
CHAIR JAMES explained the issue of excluding tobacco shops could be
addressed in the next committee of referral - the House Judiciary
Standing Committee.
Number 1665
REPRESENTATIVE IVAN asked Mr. Jones if there was an age restriction
for employees who worked in a small mom and pop store that sold
cigarettes? This was common in the smaller communities.
Number 1697
MR. JONES replied he did not know. However, if he was the owner of
a business he would error on the conservative side and not allow
someone under 19 to sell any type of tobacco product. Maybe it was
a question to take up in the House Standing Judiciary Committee as
well.
Number 1745
REPRESENTATIVE ELTON moved that the committee substitute (0-
LS0348/P, Chenoweth, 4/16/97) be adopted. There was no objection,
the committee substitute was so adopted.
Number 1760
REPRESENTATIVE DYSON moved that CSHB 79(STA) move from the
committee with individual recommendations and the attached fiscal
note(s).
Number 1770
REPRESENTATIVE AL VEZEY objected. A roll call vote was taken.
Representatives James, Berkowitz, Dyson, Elton and Ivan voted in
favor of the motion. Representative Vezey voted against the
motion. The CSHB 79(STA) was so moved from the House State Affairs
Standing Committee.
SCR 7 - THIRTY-FIRST ANNUAL BOYS' STATE
The next order of business to come before the House State Affairs
Standing Committee was SCR 7, Relating to the thirty-first annual
Boys' State.
LORALI MEIER, Intern, Senator Loren Leman, read the following
statement into the record:
"Boys State is a week-long program that provides high school boys
with knowledge of state and local government. SCR 7 recognizes the
importance of state and local, public and private involvement in
the program in order to make it successful. Because SCR 7
encourages young men to be leaders, Senator Leman believes this
exceptional program deserves the recognition and support of the
legislature."
Number 1866
REPRESENTATIVE IVAN moved and asked unanimous consent that SCR 7
move from the committee with individual recommendations and the
attached fiscal note(s). There was no objection, SCR 7 was so
moved from the House State Affairs Standing Committee.
SCR 8 - TWENTY-NINTH ANNUAL GIRLS' STATE
The next order of business to come before the House State Affairs
Standing Committee was SCR 8, Relating to the twenty-ninth annual
Girls' State.
Number 1894
MS. MEIER read the following statement into the record:
"Boys State is a week-long program that provides high school boys
with knowledge of state and local government. SCR 7 recognizes the
importance of state and local, public and private involvement in
the program in order to make it successful. Because SCR 7
encourages young men to be leaders, Senator Leman believes this
exceptional program deserves the recognition and support of the
legislature."
Number 1904
REPRESENTATIVE BERKOWITZ moved that SCR 8 move from the committee
with individual recommendations and the attached fiscal note(s).
Number 1912
REPRESENTATIVE VEZEY objected. It was not appropriate that a
senator got two bills through the House State Affairs Standing
Committee in one day.
REPRESENTATIVE VEZEY withdrew his objection.
CHAIR JAMES asked the committee members if there was any further
objection? There being no further objection, SCR 8 was so moved
from the House State Affairs Standing Committee.
CSSB 68(FIN) - TASK FORCE ON PRIVATIZATION
The next order of business to come before the House State Affairs
Standing Committee was CSSB 68(FIN), "An Act relating to the Task
Force on Privatization; and providing for an effective date."
Number 1971
SENATOR JERRY WARD, Alaska State Legislature, explained why he
introduced the bill. He talked about privatizing government during
his campaign which he discovered was more difficult once in office.
It could not be done over night. "It needs to be looked at and it
needs to be looked at carefully." As a result, he drafted a bill
to create a task force. He was not in favor of task forces or
studying something to death. Therefore, the money was divided in
half to look at each section of state government to determine if it
was in the public's interest to privatize. The functions of the
following departments would be looked at in the first year:
Transportation and Public Facilities; Corrections; and Health and
Social Services. The three departments represented $1.3 billion.
In other states, when a savings was discovered through
privatization, it was around 20 percent. He did not know where the
savings would be, but every dollar would be looked at if the bill
was passed. There were sections that would not be privatized such
as the State Troopers, but every section would be looked at.
Number 2153
CHAIR JAMES asked Senator Ward who would be on the task force and
how would they be appointed?
Number 2159
SENATOR WARD replied they would be appointed by the Speaker,
President and Governor. The task force would include senators,
representatives and members of the public; as-well-as,
representatives of the Alaska State Public Employees Union. It was
a 13-member committee - 5 appointed by the House; 5 appointed by
the Senate; and 3 appointed by the Governor.
Number 2184
CHAIR JAMES commented that the term "privatization" was a buzz
word, therefore, there were different meanings. There was a
difference between the concepts of "contracting out" and
"privatization". Privatization was when a sector of government
went out of business and the private sector picked up the
functions. Contracting out was when certain parts of government
were done by others while the government still maintained control
or oversight. In addition, in the case of contracting out, state
employees should have the same opportunity to compete for the
contract.
Number 2277
SENATOR WARD stated he also believed that state employees should be
able to compete for any of these things. In the case of the
privatization of corrections, the prisoners in Arizona were still
under the jurisdiction of the Commissioner of Corrections in
Alaska. That was an example of what should be looked at and
debated.
Number 2349
CHAIR JAMES stated that the dollar should not necessarily be the
main concern. We should also be concerned about and factor
efficiency and effectiveness into the equation.
Number 2377
SENATOR WARD replied he did not disagree. He assumed that if
something was done more efficient and effective it would be done
cheaper.
Number 2397
REPRESENTATIVE BERKOWITZ stated what Senator Ward was really going
after was what Vice President Al Gore called "reinventing
government".
SENATOR WARD replied it certainly was not what anything Al Gore
said.
Number 2417
REPRESENTATIVE BERKOWITZ further stated there were private
consulting groups that did this sort of thing for a living and were
good at it. He asked Senator Ward if he had considered this type
of service?
Number 2435
SENATOR WARD replied privatization was a policy issue and we were
the policy makers - the legislative branch. "We will make the
policy for the Administration," he stated.
REPRESENTATIVE BERKOWITZ explained he was not asking about policy.
He was asking about actual tactics. The tactics and experience
already existed with private consultants.
TAPE 97-45, SIDE B
Number 0004
SENATOR WARD stated the task forces in other states found it was a
large expense when the decision came down to the legislative body
anyway.
Number 0017
REPRESENTATIVE VEZEY commented the archives were full of studies
done on the operations of the various agencies. The management
science of out sourcing versus vertical integration was well
published. The debate was not if we should do this, but why
haven't we been doing this. He wondered, therefore, if the fiscal
note should be zero. We should be routinely doing this type of
examination anyway.
Number 0053
SENATOR WARD replied the fiscal note paid for per diem and travel
expenses of the public members. It did not include a staff
position. We were not trying to create a new entity. He agreed
that this type of discussion should be on going.
Number 0086
CHAIR JAMES explained this was her fifth year talking about
regulation reform. The political reality of any kind of reform
needed to be factored in - the public, the Administration and other
legislators. She always said that a task force was an excuse to
not do anything.
Number 0140
SENATOR WARD explained the task force would report back the next
legislative session. We were hearing about privatization now which
needed to be seriously looked at. He was opposed to just another
study as well.
Number 0202
REPRESENTATIVE ELTON stated he was struck by the irony of not
privatizing a study on privatization.
Number 0226
SENATOR WARD replied we did not need another study. We, the policy
makers, need to look at the studies and make some decisions. He
did not intend to recreate the wheel. He would consider other
models taken in other states.
Number 0280
REPRESENTATIVE ELTON replied we would get another study one way or
another either through a government task force or a private
company. He had a problem with looking at other states because
Alaska was not like other states.
Number 0319
SENATOR WARD replied the task force would be appointed by the
majority of the policy makers. He did not want experts from afar
either.
Number 0349
CHAIR JAMES stated she was concerned about the end-product. She
asked Senator Ward how he envisioned the recommendation?
SENATOR WARD replied he suspected that probably 95 percent would be
set aside by the task force while 5 percent would be set into the
category of possible privatization. And, of the 5 percent,
probably 2 percent would be identified as feasible. The task
force, however, would create its own policy mission.
Number 0413
REPRESENTATIVE BERKOWITZ explained the Tort Reform Task Force was
not highly esteemed by the House of Representatives. In addition,
we could discuss privatization every day; that was our job. He did
not understand why a task force was needed when a special committee
for example could be formed.
Number 0453
SENATOR WARD replied neither he nor the legislature were involved
in appointing the Tort Reform Task Force. If the legislature had
been involved in appointing members to the Tort Reform Task Force,
a bill would have been passed last year. He wanted to form a task
force to start the privatization debate mechanically; it was his
way of approaching an issue like this.
Number 0490
REPRESENTATIVE IVAN stated he supported the concept and the bill.
He had not had good experiences with "outside experts" because
their concepts usually did not fit the area.
Number 0574
CHAIR JAMES asked Senator Ward if he would be amenable to changing
the findings and intent of Section 1 to include the following
possible language: "to evaluate those that ought not to be done by
government but by the private sector"?
CHAIR JAMES cited a lecturer who used to work for the Department of
Transportation in Oregon. He called his presentation rightsizing
government. He concluded it was not a privatization issue, but a
simplification of the processes.
Number 0675
SENATOR WARD replied he would not be opposed to amending the
section.
CHAIR JAMES said she would work on the language further and get
back to him.
SENATOR WARD stated the gentleman from Oregon eliminated nine
layers of the department and made it run better. This was one of
the reasons why the Department of Transportation and Public
Facilities should be looked at first.
Number 0700
CHAIR JAMES stated the gentleman from Oregon indicated that you
should not privatize something that could become or was a monopoly,
or you would lose control. The railroad in Alaska was an example.
Number 0781
JAMES BALDWIN, Assistant Attorney General, Governmental Affairs
Section, Civil Division, Department of Law, was the first person to
testify in Juneau. There was clear violation of the separation of
powers between the branches by having the Governor appoint members
to the task force. There were good arguments to have everybody get
together to discuss a problem of common interest. But when the
branches cross pollinate, there was the possibility that the
legislative branch could prevail thereby weakening the other
branch. This was a foundation issue that needed to be brought to
the attention of the committee.
Number 0904
CHAIR JAMES wondered if the Long Range Financial Planning
Commission was also a violation. She asked Mr. Baldwin if the
cooperation in preparing and drafting legislation to help the
Administration was all right?
Number 0992
MR. BALDWIN replied it was very all right. It was the duty of the
Administration to freely answer questions and to provide
information to legislative committees. Similarly, the
Administration would be willing to serve and provide information
that the task force would need. He did not see that being a member
of the task force would guarantee the receipt of the information
any more than it would be compelled to now. He reiterated
appointing members to serve on a task force that was part of
another branch was a violation.
Number 1049
CHAIR JAMES said she had never thought of it that way. She was
disappointed with the Long Range Financial Planning Commission -
the process, not the results.
Number 1093
REPRESENTATIVE ELTON asked Mr. Baldwin if the blurring of the
separation of powers was because the task force was being created
by law? Didn't legislators serve on the Tort Reform Task Force?
MR. BALDWIN replied legislators did serve on the Tort Reform Task
Force. There was a blurring of the separation of powers there as
well. There were no legislators appointed at first but due to the
outcry from the legislative branch some were appointed. It was a
good example in support of what he was saying today. The Governor
waived his right to object, but he did not waive it for all time.
In this instance, the Governor was objecting; he did not want to
hold appointing authority for this task force.
Number 1168
CHAIR JAMES replied it was a constitutional mandate and it affected
the separation of powers, the Governor could not waive his right.
MR. BALDWIN replied he could not waive it for all time. But he
certainly could allow it to happen. The examples had already been
cited. In addition, a waiver would not bind the next Governor and
it did not bind the current Governor.
Number 1224
CHAIR JAMES wondered if the legislature would have the option to
waive its rights. The Governor, she believed, had the authority to
establish any kind of task force on any issue with or without
legislative approval. He would have the right to include
legislators if he wanted, especially if they could not influence
the end result. The Tort Reform Task Force was not the same as the
task force in SB 68 or the Long Range Financial Planning Commission
because this was a legislative decision that actually joined the
two branches. She agreed the legislature did not have the right to
do that. It was not an issue of whether or not the Governor wanted
to have appointment power, it was whether or not he should have the
power.
Number 1364
REPRESENTATIVE ELTON commented the task force would not set policy
or make law, it would just make a recommendation. He wondered,
therefore, if the purpose of the task force mitigated the concern
of cross pollinazation?
Number 1392
MR. BALDWIN replied it could. It was important to consider who was
being advised, however. This was a very important task force; it
would advise the legislature that could change the laws.
Number 1442
CHAIR JAMES said she understood why the Governor did not want to
participate. However, it would be hard to accomplish the goal of
the task force without Administrative help, information, and
knowledge. The Administration knew more about the inner workings
of the agencies. She asked Mr. Baldwin if he knew how the Governor
would respond to requests from the task force for information?
Number 1553
MR. BALDWIN replied the Administration was not willing to sit on
the task force, but it would be willing to assist in any way
possible by providing information and data.
Number 1593
REPRESENTATIVE DYSON asked Chair James what her intentions were in
regards to the bill today?
CHAIR JAMES replied she did not have any intention. She assumed it
would be passed out at some point. A few amendments looked like
they were needed.
Number 1635
SENATOR WARD stated it was very important that the Administration
be involved in the task force in the interest of the state. He
understood the concerns, but they were unjustified fears. He did
not believe that the Governor would veto the bill. He also
believed that the Governor would appoint members to the task force;
it would not work without his participation.
Number 1708
CHAIR JAMES announced she wanted to get a second legal opinion
before forming an opinion. The bill would not be moved from the
committee today.
Number 1750
MIKE McMULLEN, Personnel Manager, Division of Personnel, Department
of Administration, was the next person to testify in Juneau. His
testimony was neither pro nor con today but to ensure that the
committee understood the process as we saw it. Most of the
collective bargaining contracts had provisions for a formal
feasibility study in regards to contracting services out. The
study had to be announced to the union with the ability to bid for
an alternative. If the study indicated that money would be saved
then the state was free to contract the work and lay state
employees off. In addition, upon reviewing the recommendations in
November from the task force, the departments would be asking for
money and time to conduct their own feasibility study before the
effective dates. The feasibility study would probably come up with
different results than the task force creating a conflict. He did
not know a way around the potential conflict, however.
Number 1956
CHAIR JAMES stated that her understanding of privatization was not
the same as contracting out. The state could currently contract
out; it was generally a determination of the Administration and not
the legislature. If the legislature privatized a part of
government it would change the law. She believed, for example,
that the permitting process for natural resources should be
privatized. It required professionals such as engineers.
Therefore, if the public needed a permit, they could pay an
engineer for the service. Privatization was letting the public
sector compete and provide the service and not the government as
opposed to contracting out.
Number 2099
MR. McMULLEN replied he agreed with her characterization of
privatization. The expectations of the bill, however, also
included contracting out; and, unless the task force clarified its
purpose, the contracting out issue would come up.
CHAIR JAMES replied she also continued to hear the term "out
sourcing". Privatization did not include out sourcing.
Number 2172
FRANK SMITH was the first person to testify via teleconference in
Barrow. He appreciated the testimony in regards to privatization
creating a monopoly. There was already a great deal of influence
in Alaska of providers in the corrections field. He was also
concerned about the composition of the task force. If the
Governor's appointees were not included, the minority would only be
represented by two members causing a skewed outlook. As a result,
the task force could not look at the real cost for example. He
cited the cost of the prison in Arizona did not look at the chances
for parol being relocated so far from home and support. He
reiterated he was concerned that the providers would call the
shots.
Number 2367
PAMELA LaBOLLE, President, Alaska State Chamber of Commerce, was
the next person to testify in Juneau. The chamber was in favor of
privatization and SB 68. A copy of our resolution had been
provided to the committee members. The resolution requested that
the legislature and Governor forge a plan by the end of 1997 to
implement a program to privatize the applicable services currently
provided by government. The chamber had held privatization
seminars in 1995 and 1996. A general approach was taken in 1995 to
look at the services that had been privatized throughout the
nation. A focused approach on transportation was taken in 1996.
TAPE 97-46, SIDE A
Number 0001
MS. LaBOLLE further stated there were services that only the
government could and should provide. Alaska had grown beyond that
concept, however, now that there was less money. The chamber was
not satisfied with what happened with the Long Range Financial
Planning Commission. The intention was to study the issue and make
a recommendation for possible actions by the legislature because
the legislature represented the people of the state. "We don't
like to see groups of people taking on that function." The caveat,
therefore, was that the task force would make recommendations to
the legislature and based upon public input
the legislature would develop privatization plans.
MS. LaBOLLE further commented on the quote by the Department of Law
indicating the power of a citizen group versus the power of a
legislative group. The Constitution of the United States said that
the political power resided with the people.
Number 0249
CHAIR JAMES replied an individual person could not come in and
vote, but an individual person could influence the vote.
CHAIR JAMES read the following provision from the Alaska State
Chamber of Commerce's Resolution:
"THEREFORE, BE IT RESOLVED that the Alaska State Chamber of
Commerce strongly encourages the privatization of those state
services which could be competitively provided in the private
sector; and"
CHAIR JAMES cited British Columbia, Canada sold all of their
equipment to the incoming contractor for repair and maintenance of
their roads. The provence was divided into districts for different
contractors. The cost was about the same in the end but the
economy improved because the money that the government spent went
to wages. While the money that the private sector spent went into
the pockets of the people. Therefore, effectiveness, efficiency
and competition needed to be looked at when addressing the issue of
privatization. Competition needed to be looked at to prevent a
monopoly.
Number 0469
MS. LaBOLLE replied there was no reason why present governmental
organizations could not compete for the services on a level playing
field. The pyramid of government where the tax payers were on the
bottom was inverted and would eventually topple - too much
government and not enough private enterprise to support it.
Number 0549
CHAIR JAMES explained she thought of these issue deeply because of
her accounting background. She was not sure if current
governmental organizations could compete for private services
because if they did not win the bid they would be disbanded and not
available to compete the next time. It was more of a placate.
CHAIR JAMES reiterated she would like to see a definition of the
term "privatization" separate from the terms "out sourcing" and
"contracting" for clarification. She asked Ms. LaBolle if she
agreed a definition of privatization was needed?
Number 0656
MS. LaBOLLE replied, "Yes." It could be one of the tasks of the
task force. In addition, the chamber did not buy the arguments of
the separation of powers. If it was just a group of people looking
at the issue and making recommendations that could or could not be
followed by the legislature then it was not a problem.
CHAIR JAMES announced she would get an opinion from the Legislative
Legal and Research Services in regards to the separation of powers
concern. The bill would be held over until a later date yet to be
determined.
ADJOURNMENT
Number 0744
CHAIR JAMES adjourned the House State Affairs Standing Committee
meeting at 9:50 a.m.
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