Legislature(1993 - 1994)
03/29/1994 08:00 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE March 29, 1994 8:00 a.m. MEMBERS PRESENT Representative Al Vezey, Chairman Representative Pete Kott, Vice Chairman Representative Bettye Davis Representative Gary Davis Representative Harley Olberg Representative Jerry Sanders Representative Fran Ulmer MEMBERS ABSENT None COMMITTEE CALENDAR HB 393: "An Act relating to the unincorporated community capital project matching grant program; and providing for an effective date." HELD IN COMMITTEE *HB 531: "An Act relating to the existence and functions of certain multimember state bodies, including boards, councils, commissions, associations, or authorities; and providing for an effective date." HELD IN COMMITTEE *HB 530: "An Act relating to certain study, publication, and reporting requirements by and to state agencies; relating to certain fees for reports; and providing for an effective date." HELD IN COMMITTEE (* First public hearing) WITNESS REGISTER KAREN BRAND, Staff Representative Carl Moses Alaska State Capitol, Room 204 Juneau, AK 99811-0460 Phone: 465-4451 POSITION STATEMENT: Addressed HB 393 for Representative Carl Moses, Sponsor LAMAR COTTEN Lake & Peninsula Borough P.O. Box 103733 Anchorage, AK 99510 Phone: 258-7153 POSITION STATEMENT: Commented on CSHB 393 MICHAEL CUSHING, Research Analyst Department of Community and Regional Affairs P.O. Box 112100 Juneau, AK 99811-0200 Phone: 465-4751 POSITION STATEMENT: Answered questions on CSHB 393 KRISTIE LEAF, Director Boards & Commissions Office of the Governor P.O. Box 110001 Juneau, AK 99811-0001 Phone: 465-3500 POSITION STATEMENT: Addressed HB 531 for the Office of the Governor, Sponsor GEORGE SMITH, Deputy Director Libraries, Archives & Museums Department of Education P.O. Box 110571 Juneau, AK 99811-0571 Phone: 465-2910 POSITION STATEMENT: Answered questions on HB 531 BRUCE KATO, Chief Curator Libraries, Archives & Museums Department of Education 395 Whittier St. Juneau, AK 99801-1746 Phone: 465-4866 POSITION STATEMENT: Answered questions on HB 531 JAN DEYOUNG Alaska Labor Relations Agency P.O. Box 107026 Anchorage, AK 99510 Phone: 269-4895 POSITION STATEMENT: Addressed Section 10 of HB 531 STEVE SORENSON Museum Collection Advisor Committee One Sealaska Plaza, Suite 301 Juneau, AK 99801 Phone: Not given. POSITION STATEMENT: Commented on HB 531 BEA SHEPARD, Member Board of Museums Alaska Friends of the Alaska State Museums P.O. Box 20272 Juneau, AK 99801 Phone: Not given. POSITION STATEMENT: Opposed parts of HB 531 KENNETH DEROUX Museum Collection Advisor Committee P.O. Box 21066 Juneau, AK 99802 Phone: Not given. POSITION STATEMENT: Commented on HB 531 LINDA REXWINKEL, Program Budget Analyst Office of Management & Budget Office of the Governor P.O. Box 110020 Juneau, AK 99811-0020 Phone: 465-4694 POSITION STATEMENT: Addressed HB 530 for the Office of the Governor, Sponsor PREVIOUS ACTION BILL: HB 393 SHORT TITLE: UNINCORPORATED COMMUNITY CAP PROJECT GRAN SPONSOR(S): REPRESENTATIVE(S) MOSES JRN-DATE JRN-PG ACTION 01/21/94 2125 (H) READ THE FIRST TIME/REFERRAL(S) 01/21/94 2125 (H) CRA, STATE AFFAIRS, FINANCE 02/08/94 (H) CRA AT 01:00 PM CAPITOL 124 02/08/94 (H) MINUTE(CRA) 02/22/94 (H) MINUTE(CRA) 02/28/94 2545 (H) CRA RPT CS(CRA) 3DP 2NR 1AM 02/28/94 2545 (H) DP: BUNDE, TOOHEY, OLBERG 02/28/94 2545 (H) NR: WILLIS, WILLIAMS 02/28/94 2545 (H) AM: DAVIES 02/28/94 2545 (H) LETTER OF INTENT WITH CRA REPORT 02/28/94 2546 (H) -4 ZERO FNS (DCRA,ADM,LAW,DOT) 2/28/94 02/28/94 2546 (H) REFERRED TO STATE AFFAIRS 03/29/94 (H) STA AT 08:00 AM CAPITOL 102 BILL: HB 531 SHORT TITLE: ELIMINATE SOME STATE MULTIMEMBER BODIES SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-PG ACTION 03/11/94 2728 (H) READ THE FIRST TIME/REFERRAL(S) 03/11/94 2728 (H) STATE AFFAIRS 03/11/94 2728 (H) -7 ZERO FNS (DCRA,2-DCED,CORR, 2-DOE 03/11/94 2728 (H) DNR) 3/11/94 03/11/94 2729 (H) GOVERNOR'S TRANSMITTAL LETTER 03/29/94 (H) STA AT 08:00 AM CAPITOL 102 BILL: HB 530 SHORT TITLE: REQUIRED REPORTS OF STATE AGENCIES SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-PG ACTION 03/11/94 2727 (H) READ THE FIRST TIME/REFERRAL(S) 03/11/94 2727 (H) STATE AFFAIRS, FINANCE 03/11/94 2727 (H) -16 ZERO FNS (5-ADM, 2-DCED, 2-DOE, DEC, 03/11/94 2727 (H) DNR, DMVA, 2-DPS, REV, DOT) 3/11/94 03/11/94 2727 (H) GOVERNOR'S TRANSMITTAL LETTER 03/29/94 (H) STA AT 08:00 AM CAPITOL 102 ACTION NARRATIVE TAPE 94-39, SIDE A Number 000 CHAIRMAN VEZEY called the meeting to order at 8:02 a.m. Members present were REPRESENTATIVES KOTT, SANDERS, OLBERG and ULMER. CHAIRMAN VEZEY announced there was a quorum present. He noted the meeting was on teleconference with Anchorage. HB 393 - UNINCORPORATED COMMUNITY CAP PROJECT GRANT CHAIRMAN VEZEY opened CSHB 393 for discussion. Number 025 KAREN BRAND, STAFF, REPRESENTATIVE CARL MOSES, gave a brief overview of CSHB 393. (REPRESENTATIVE B. DAVIS joined the meeting at 8:03 a.m.) MS. BRAND stated CSHB 393 amends Alaska Statute Chapter 37, which is eligibility requirements to participate in unincorporated community capital matching grants program. Currently, only unincorporated communities that exist outside of boroughs can participate directly in the program. Those located within boroughs participate indirectly by obtaining a small share of municipal moneys the borough has received, if the borough sees fit. MS. BRAND stated CSHB 393 levels the playing field. Those unincorporated communities within boroughs, with 25 or more permanent residents, will be able to participate directly in the program administered by Department of Community & Regional Affairs (DCRA). She noted CSHB 393 would become effective July 1, 1994. MS. BRAND commented when the language for the program was drafted, there was an oversight in recognizing the Mat-Su Borough, Kenai Peninsula Borough and the Lake & Peninsula Borough, which have respectively 3, 5 and 11, unincorporated communities within them. MS. BRAND examined the two amendments adopted by the Community & Regional Affairs Committee. On page 2, the amendment allows borough oversight of the projects the unincorporated communities choose to fund. The second amendment eliminated a qualifier the sponsor had attached to require the community to be outside of the normal road system. She noted CSHB 393 now allowed unincorporated communities with 25 or more residents to become eligible to participate directly in the program. (REPRESENTATIVE G. DAVIS joined the meeting at 8:05 a.m.) CHAIRMAN VEZEY noted REPRESENTATIVE G. DAVIS's arrival. Number 089 REPRESENTATIVE FRAN ULMER inquired why the number 25 was chosen for the minimum number of residents, how many communities of this size could afford to meet the local match requirements and if the program would be justified. MS. BRAND responded that in consulting with the drafter, 25 residents was consistent with the Department of Community & Regional Affairs (DCRA) community population base. Number 113 CHAIRMAN VEZEY clarified the statutes in Chapter 37 which CSHB 393 amends, were just passed in 1993. He reiterated MS. BRANDS comments. He noted if the $25,000 funding unit was maintained, CSHB 393 would add $1.5 million to the appropriation. The addition of nearly 60 communities to the program by CSHB 393 may also substantially reduce the funds received by the communities brought into the program in 1993. He stated CSHB 393 may produce `winners' and `losers.' He questioned what was being corrected. How would the list be different. Number 149 MS. BRAND responded a total of 25 different communities were affected by an oversight of certain boroughs. She noted the Northwest Arctic Borough and the Denali Borough as additional examples. She emphasized the Lake & Peninsula Borough with 11 communities receiving a little over $3,000, was the hardest hit. Other communities usually receive approximately $25,000. MS. BRAND commented the Governor's 1994 capital budget funded the program again for $20 million. She agreed with CHAIRMAN VEZEY's $1.5 million impact; however, they had intended the capital funds would be broken up - half from the municipal and half from the unincorporated section. The breakup of the funds would bring down the $25,000 cap to possibly $23,000-$24,000. The municipal section would also reduce slightly. MS. BRAND addressed CHAIRMAN VEZEY's estimation of 60 communities which would be eligible. She commented 60 communities was a maximum quote and there would not be a final determination until later. DCRA would have to judge which communities would be eligible in some cases. She believed the number of communities would range from 40-60. Number 202 CHAIRMAN VEZEY mentioned 12 communities in the Fairbanks North Star Borough he believed might apply to CSHB 393. He felt the number of eligible communities would grow. MS. BRAND replied it was their intent to focus on more rural, isolated communities. Number 219 CHAIRMAN VEZEY asked if CSHB 393 did that. MS. BRAND affirmed CHAIRMAN VEZEY. The Community & Regional Affairs Committee (CRA) had discussed the issue and decided not to narrow the eligibility in CSHB 393 as much as the original HB 393 had proposed. The road system requirement was thereby eliminated. Number 230 CHAIRMAN VEZEY referred back to AS 29.60.140, which implies if a community was eligible, it still is, and vice versa. He questioned if the wording was actually leveling the playing field. Number 238 REPRESENTATIVE HARLEY OLBERG clarified the intent of CRA was to treat all communities equally that were similarly situated, regardless of whether they were on or off the road system. Number 243 CHAIRMAN VEZEY pointed out the statute stated the community had to be eligible, not that they had to receive aid. He believed Salcha, Ester, Fox, Chatanika, Six Mile Village and Badger Village fit into the description of an unincorporated community under CSHB 393. Number 264 MS. BRAND replied DCRA had provided a list of all potential candidates that might be eligible under CSHB 393. She noted if CSHB 393 were to pass, DCRA would have the authority to make judgments and imply the intent of the legislation. Number 276 CHAIRMAN VEZEY stated he was troubled with the authority given to the DCRA to determine the eligibility of communities. He asked why Moose Creek would not be eligible, and if it was not because of a DCRA decision, he believed CSHB 393 was "loose legislation." He understood the intent of CSHB 393; that being to make communities within boroughs eligible for the community capital matching grant program. MS. BRAND agreed with CHAIRMAN VEZEY on the intent of CSHB 393. Number 290 CHAIRMAN VEZEY clarified those communities within unified municipalities had been eliminated. He noted Anchorage and Juneau. MS. BRAND affirmed CHAIRMAN VEZEY. She stated that qualifier eliminated questionable places such as Douglas, which would technically apply. She noted for several pieces of passed legislation, it is DCRA's job to apply the particular program. Number 306 CHAIRMAN VEZEY stated when a population statistic which is not published by the United States Census Bureau (USCB) is deviated from, the potential chance for litigation arises. He noted the USCB is the only database to withstand all court challenges on the federal level. He questioned if it was good practice to deviate from the USCB statistics. Number 325 MS. BRAND responded when CRA brought up the same issue they found the USCB in very rural parts of Alaska did not have the most reliable population data. Therefore, CSHB 393 leaves DCRA to decide if there is a more accurate form of population data. Number 335 CHAIRMAN VEZEY stated he had received testimony from the Department of Labor which states the 1990 census was the most accurate database ever. He asked if MS. BRAND had heard contrary. Number 340 MS. BRAND answered no, she had not heard that testimony. She commented if DCRA finds the USCB the most reliable source, they will choose it as their source of population data. Number 349 CHAIRMAN VEZEY questioned how the DCRA could prove that they put more effort into establishing a database. Number 361 LAMAR COTTEN, LAKE & PENINSULA (L&P) BOROUGH, commented on CSHB 393. He stated the L&P borough had 17 communities, of which only five are incorporated. He noted the 11 eligible communities are similar to the five incorporated communities in terms of services and powers. He conveyed they should all be treated equally. MR. COTTEN referred to the CRA discussion of whether the borough would have oversight of the moneys in the unincorporated communities. He stated L&P does oversee the moneys and it also has its own capital matching program. To promote economic development, the L&P provides small unincorporated communities with grants; thereby they can seek a larger capital matching grant package. MR. COTTEN stated some individuals suggest CSHB 393 is a disincentive for people to organize their cities, believing the program is a "carrot" for small communities in rural Alaska to organize. He rebutted in many of the communities, however, there is no basis to have a city. Some communities already have an existing entity, such as an IRA council or a nonprofit group, that provides basic services. He commented CSHB 393 is a disincentive to large borough areas to organize as boroughs. He noted a series of unorganized communities which, if organized into a borough, would be ineligible for the program. CSHB 393 would be a policy question for L&P. Number 403 REPRESENTATIVE ULMER related to the differentiation between communities. She then compared the legislature providing money for unincorporated communities in unorganized boroughs to organized boroughs providing money to their own unincorporated communities. She understood communities from unorganized boroughs are worried their communities would have to sacrifice something or have less resources. She inquired which communities have these concerns. She was concerned that incorporated communities will choose to become unincorpoated if additional benefits were offered to unincorporated communities. She emphasized CSHB 393 might be expediting this process. Number 432 MR. COTTEN responded he did not know which communities were considering dissolving their city governments. He noted each community is unique; however, they each probably have other governments (e.g., IRA council, nonprofit organization) which provide the basic services they expect. There is too much emphasis on state subpolitical units as the only legitimate group that can provide the minimal level of services. He agreed that boroughs to provide a broader possible source of funding and they are a positive step. L&P has a raw fish tax, basically an income tax, on the gross ex-vessel value of the fish sold. Number 460 REPRESENTATIVE ULMER commented CSHB 393 impacts a lot of public policy associated with the way development occurs in rural Alaska. She agreed the legislative structure of government was not the only way that makes sense. She questioned the level of responsibility the state should have to fund those communities. She reiterated her concern about the 25 resident quota, believing the smaller the number, the more the state may be acting as an incentive for unsustainable projects. Number 472 MR. COTTEN agreed with REPRESENTATIVE ULMER's point made about the 25 resident quota. REPRESENTATIVE ULMER's statement applied more to unincorporated communities in unorganized boroughs. He noted the regional planning powers in organized boroughs which cannot be transferred to unincorporated communities, thereby forcing them to participate. Technical assistance and matching grants are assured from an organized borough. He pointed out CSHB 393 would be a disincentive for 10 unincorporated communities receiving grants to organize a borough because they would no longer be eligible for the program. Number 491 CHAIRMAN VEZEY asked why Salcha or Moose Creek in the Fairbanks North Star Borough would not be eligible for a grant with CSHB 393. Number 494 MR. COTTEN answered they may be eligible. He did not believe DCRA was trying to "push them away" because they are not traditional rural communities. They may be included because of the new road system provision from CRA. Number 505 CHAIRMAN VEZEY asked what would happen if the threshold of 25 was raised to 100 with respect to L&P. MR. COTTEN responded that in L&P, of the 11 eligible, 4-5 would then be ineligible. He referred back to CHAIRMAN VEZEY's comments about the USCB database from 1990 and noted the effective date of the program was 1995 whereby the database may still show a community as being under 100 in population even if it was not. He stated, boroughs to be in compliance with revenue sharing and municipal assistance do a survey of communities. In the past, communities were mapped out and individuals were identified by name and location. He believed this system was accurate and it cut down on exaggeration. Number 536 CHAIRMAN VEZEY noted billions of dollars are based on population census. He stated the USCB census has always been upheld in court. He expressed concern over future litigation which may arise from DCRA decisions and noted the communities would be public interest litigants, whereby the state would have to pay for it. Number 555 MICHAEL CUSHING, RESEARCH ANALYST, DEPARTMENT OF COMMUNITY & REGIONAL AFFAIRS, answered questions on CSHB 393. He referred back to CHAIRMAN VEZEY's previous questions about Moose Creek and other areas, and stated the communities he had mentioned were included in the list of 60 communities DCRA had proposed. The Fairbanks North Star Borough included Fox, Moose Creek, Pleasant Valley, Salcha and Two Rivers. He noted the DCRA list of 60 communities was the upper limit they believed would be in the program. DCRA assumed the list would be based on their current operating regulations for the revenue sharing program. He mentioned a social unit test. Number 577 CHAIRMAN VEZEY asked for a description of a social unit test. Number 578 MR. CUSHING explained statutes set communities with 25 or more residents as a social unit. A social unit is defined by DCRA in regulations in some detail. The communities cannot be transient or a work place (e.g., logging camp). He stated there are certain tests to establish there is a contiguous social unit that exists for a community, in perpetuity. He noted a community with strict rules as to who could live in the community (e.g., a religious commune) would not meet the social unit test according to DCRA regulations. An autonomous community with basic services would be looked for. He pointed out they sometimes must make calls when dealing with competing entities. He understood there were gray areas in judgment calls; however, it is DCRA's job to establish precedents and the rules. He stated after DCRA works with the 60 communities on the list, he expected 40-50 would ultimately satisfy the social unit test, presuming the social unit test applied to CSHB 393. MR. CUSHING referred to the USCB census as a reliable source, but noted the major problem is that it is only done every 10 years. Alaska grows too rapidly to use a number from 1990. The DCRA has set the census as a floor, then the state demographer in the Department of Labor using a permanent fund analysis, works from there. The new numbers are provided to the communities and they are given the opportunity to appeal them. If the communities find the demographer incorrect, the onus is on them to prove through a local survey that they have grown faster than estimated and their number is larger. He noted in the time he has been with the program they have never been litigated. When communities reach the alternative low levels around 25 residents, which could consist of 4-5 families, regional offices notify DCRA and they dispatch to work with the community and resolve its actual population. Number 653 REPRESENTATIVE ULMER mentioned communities of 25 composed of four families, and asked as a matter of public policy, what it meant when the state offered them $25,000 in matching grants. Could the very small communities sustain the operating and maintenance costs of the facilities. Number 661 MR. CUSHING responded the communities on their list are higher in population - 87, 746, 589, 144, 157, 60, 519, 105. He emphasized the communities they are focusing on are within the 100-500 range. There had been concerns with the original HB 393 because of its narrow restriction to smaller communities; however, CSHB 393 reduces this concern. He proposed some smaller communities may want to build bridges to access more resources or sheds to cover a piece of equipment, thereby better accommodating their area. Inspection is necessary. TAPE 94-39, SIDE B Number 000 REPRESENTATIVE OLBERG commented they should not be too hard on small communities because he could think of a "community of 600,000 that bought a bunch of stuff it can't afford." Number 016 CHAIRMAN VEZEY referred back to census data and stated every Alaskan community increases in the summer and decreases in the winter. USCB data is by law April 1st. He asked if DCRA did a statistical adjustment for the time of year the census is taken. How many resources is DCRA putting into building a database. He recalled the Department of Labor population estimate for Alaska was six-seven percent higher than the USCB results in 1990. Number 041 MR. CUSHING responded USCB admits there is a three-four percent under count in their numbers which they assume is across the playing field. DCRA does not maintain an active database. DCRA places the onus for resources for the demonstration of populations on the communities. He noted larger communities spend thousands of dollars to develop a population figure for planning purposes and the program. DCRA provides guidelines, then monitors their survey and results. In August, DCRA sends out a population determination, on which they have opportunity until November to appeal against. He stated the DCRA has two analysts plus himself, who throughout the fall work with the communities on their census formulas. If they are not satisfied with the communities demonstration, the communities have to send in various certified documentation for verification. Number 096 CHAIRMAN VEZEY asked if CSHB 393 was working for or against the state's overall intended direction; being less involved in the unincorporated borough. He was concerned that CSHB 393 might be encouraging communities to break off from organized boroughs. Number 118 MR. CUSHING responded CSHB 393 is a disincentive to regional government incorporation. Number 123 CHAIRMAN VEZEY stated CSHB 393 was a disincentive to regional incorporations. Number 124 MR. CUSHING corrected CSHB 393 was a disincentive to borough incorporations. Communities tend to lose substantial funds when they join into a borough, whereby the borough only receives a blanket amount. Number 156 CHAIRMAN VEZEY, hearing no more testimony, stated he would like to further examine information from DCRA before action was taken on CSHB 393. CSHB was held in committee. CHAIRMAN VEZEY asked if the everyone in the committee had received the new fiscal note. MS. BRAND commented on the fiscal note. She stated all of the original fiscal notes received on CSHB 393 were zero. She pointed out the analysis for the new fiscal note and explained DCRA had been unclear as to the planned action of House and Senate Finance Committees, whether or not the grants administrators were to be cut back. If they were cut back, DCRA would need to restore one of the positions. Current staff, however, can handle the additional workload made by CSHB 393. She noted House Finance has already closed out DCRA and they did not cut any grants administrators, therefore the new fiscal note would not apply. Senate Finance is still closing out the DCRA operating budget. She stated, upon speaking with Senate Finance staff, they do not intend to cut back the grants administrators. Number 213 CHAIRMAN VEZEY clarified DCRA would request the additional staff to administer grants. Number 215 MS. BRAND added if the grant administrators were cut back on their present staff by either finance committee. She noted neither committee had done so yet. She was hesitant to order a new fiscal note because the Senate was not yet done with their DCRA budget. HB 531 - ELIMINATE SOME STATE MULTIMEMBER BODIES Number 220 CHAIRMAN VEZEY opened HB 531 for discussion. (REPRESENTATIVE OLBERG left the meeting at 9:00 a.m.) Number 234 KRISTIE LEAF, DIRECTOR BOARDS & COMMISSIONS, OFFICE OF THE GOVERNOR, addressed HB 531. She said HB 531 is a governmental efficiency bill. HB 531 updates statutes for about nine state boards which are not funded, appointed or meeting. She noted some of the boards have been dormant between 10-20 years. These boards should be taken off the books because they have no constituencies or members. MS. LEAF stated HB 531 streamlines procedures associated with the Alaska Labor Relations Agency and the Board of Parole. HB 531 eliminates the statutory Alaska School Activities Association because there is now a nonprofit organization, Alaska School Activities Association, Inc. The state would be removed from any liability for the private nonprofit organization. MS. LEAF stated HB 531 transfers the duties of the Museum Collections Advisory Committee to the Department of Education, and eliminates the committee. She noted the committee is very costly and redundant for a very modest program. MS. LEAF mentioned HB 531 has zero fiscal notes from all affected agencies. She directed the committees to the sectional analysis in their packets. Number 261 REPRESENTATIVE ULMER questioned the action regarding the Museum Collection Advisory Committee (MCAC). She noted the MCAC was still very active in protecting the $24 million in investments the state has made in acquisitions. If volunteers were not doing it, the state would have to hire other people to do it. Why was the elimination of the MCAC included in HB 531 when it is an efficiency. MS. LEAF answered the MCAC currently costs about $25,000 in direct and indirect costs. Their acquisition budget is about $50,000. Safeguards were not set up for the MCAC procedures when it began. Currently, the museum department has an internal review process for acquisitions and deaccessions from the museum collections. Therefore, the MCAC is a redundant function. She noted the museum department has proposed an additional procedure as to how the functions of the MCAC will be handled. CHAIRMAN VEZEY stated HB 531 proposed eliminating the Milk Board. MS. LEAF affirmed CHAIRMAN VEZEY. Number 293 CHAIRMAN VEZEY inquired why the state was regulating milk. MS. LEAF replied she could not. The Milk Board currently exists in statute with its functions. The intent of HB 531 is to alleviate a board which has not met in 15 years. The board's functions would be transferred to the Director of Agriculture. The Milk Board's duty had been to advise the director in forming policy for the market program, receive complaints, report to the director and assist him in data collection. Number 311 CHAIRMAN VEZEY mentioned the Parole Board, and stated they believe HB 531 codifies their current procedure for conducting business. The Parole Board had expressed to him a different procedure would require a full-time Parole Board. MS. LEAF replied that was correct. Number 317 CHAIRMAN VEZEY noted a house cleaning measure on the Railroad Labor Relations Agency. Current statute provides in a binding arbitration action, the arbitrator be the same person as the mediator, which is contrary to federal regulations. HB 531 would bring Alaska statutes in line. Number 329 REPRESENTATIVE ULMER referred back to the MCAC and asked what the breakdown was of their direct and indirect costs. She noted the availability of teleconferences which would cut down on travel expenses. She emphasized her concern about only having an internal review process in purchasing acquisitions. She noted the potential for lack of expertise without the MCAC. The external public participation process could guarantee no "insider trading." MS. LEAF deferred the answer to REPRESENTATIVE ULMER's comments to GEORGE SMITH. Number 361 GEORGE SMITH, DEPUTY DIRECTOR, DIVISION OF LIBRARIES, ARCHIVES & MUSEUMS, DEPARTMENT OF EDUCATION, answered questions on HB 531. The MCAC was organized in the early 1970s because there were virtually no controls over the actions of the museum. Acquisitions were then made by trading off artifacts out of the museum. He emphasized this was no longer appropriate. MCAC was enacted to provide oversight for acquisitions, as well as deaccessioning materials out of the museum collection. MR. SMITH stated currently, the museum staff expertise is very high. Very strong internal controls now exist for how materials are accessioned. First, the curator of collections makes a recommendation for purchase. A committee of five, whose expertise is quite varied, review the recommendation for what it will do for the collection, as well as appropriateness. If the recommendation is chosen to be purchased it goes to the chief curator of the museum. If the purchase is under $1,000, it may be approved by the chief curator and then purchased. If it is over $1,000, the MCAC review is required. He recollected the MCAC has never opposed a recommendation. The recommendation is then signed off and purchased. He estimated the museum purchases 5-10 items in a year out of its $50,000 acquisitions budget. MR. SMITH stated, because of their wide expertise and perspectives, the internal controls should be able to takeover the MCAC. He noted the likelihood of collusion was extremely remote. He advised after the recommendation was to proceed through the same internal procedures, when signed off by the chief curator, it would have to be signed off by the director of the division, as well as the commissioner. (REPRESENTATIVE SANDERS left the meeting at 9:09 a.m.) MR. SMITH commented deaccessioning is "almost a mute point." The commissioner of the Department of Administration must approve all deaccessioning which involves the museum. He noted the MCAC does not have oversight of the $25 million collection, automated internal auditing does. MR. SMITH explained most of the MCAC meetings are by teleconference; however, 1-2 times a year they meet in person. He noted the overwhelming cost was the administrative cost of the museum staff. Number 454 CHAIRMAN VEZEY asked about the approval of gifts. He expressed concern because a lot of money is spent on storing gifts. MR. SMITH deferred the answer to BRUCE KATO, CHIEF CURATOR. He noted the museum does have the right to reject gifts, and it does. They use the same criteria for choosing a gift as they do when examining a purchase. The internal committee questions if it fits into the collection, if it is appropriate and if it is conservable. Number 478 BRUCE KATO, CHIEF CURATOR, ALASKA STATE MUSEUMS, answered questions on HB 531. He stated he is responsible for the state museum programs and the Alaska State Museum, Juneau, and the Sheldon Jackson Museum, Sitka. He explained HB 531 would streamline the acquisition process. He stated the change was driven by costs for the implementation of the MCAC. Their budget allows $13,000 in travel expenditures, of which $7,000 is expended for MCAC travel. He noted the MCAC is out of compliance because current statute requires two face to face visits a year. They had substituted one of the meetings with a teleconference. He questioned the use of having MCAC members from around the state, as opposed to local members, to avoid the cost. MR. KATO expressed for the amount of money they make acquisitions with, the MCAC is not justifiable. They have enough internal controls to oversee the process. He compared the cost of the MCAC with how much they currently pay for their insurance policy. They carry a $40,000 policy in the event there is some damage to their collections. With a $25 million almost irreplaceable collection, the $40,000 is essentially "thrown away." Number 524 CHAIRMAN VEZEY inquired if the insurance the museum is buying is $40,000 in coverage, or is the insurance premium $40,000. Number 526 MR. KATO answered $40,000 is the premium they pay for $25 million in coverage. He stated many museums do not carry insurance because if there was a substantial loss it would already be irreplaceable. MR. KATO referred to CHAIRMAN VEZEY's question about donations. Their controls have been successful in purging items, by auction for example, which are not appropriate for their collection. He gave the example of a Navajo blanket. The money then goes back into their collections funds for reallocation. (REPRESENTATIVE SANDERS rejoined the meeting at 9:20 a.m.) Number 544 CHAIRMAN VEZEY asked what they received for the Navajo blanket. Number 545 MR. KATO answered a spruce root basket. Number 547 REPRESENTATIVE ULMER commented she did not mean to suggest she distrusted the staff, but she had to consider future Administrations which may have to work without the MCAC. MCAC works as a safeguard to ensure proper evaluation. She noted evaluation in the museum is heavily based on judgment. She concluded a diverse informed group outside of the museum was a nice protection feature. She mentioned only having one teleconference per year, whereby the description materials could be sent out prior to the meeting. Number 579 MR. KATO related to the value of the MCAC as insurance; was it worth the amount they apply towards it. He likened the situation to their premium paid through risk management; was it worth the cost for the protection. He noted current staff has not had a problem with collusion. Number 596 CHAIRMAN VEZEY called for a recess at 9:25 a.m. The meeting resumed at 9:32 a.m. Members present were REPRESENTATIVES KOTT, OLBERG and G. DAVIS. CHAIRMAN VEZEY moved to the Anchorage teleconference site. Number 603 JAN DEYOUNG, ADMINISTRATOR, ALASKA LABOR RELATIONS AGENCY, addressed Section 10 of HB 531. She began railroad employees are "strike eligible," whereby if they impasse in negotiations they must seek a mediator to work with them and the Railroad Corporation to reach an agreement. If using a mediator fails, the employees are entitled to take a vote, then they may strike. The Railroad Corporation can enjoin the strike through the court if it threatens or interferes with public safety and welfare. Presently, if the court enjoins the strike, it can order the parties to binding interest arbitration. An arbitrator would then review both sides and issue a contract stating the terms and conditions of employment. MS. DEYOUNG explained present statute requires that the person who served as the mediator pre-strike, later serve as the interest arbitrator. She emphasized the mediators are well educated, trained, and free as they are federally provided; however, the Federal Mediation & Conciliation Service (FMCS) Charter will not allow mediators to serve as interest arbitrators. Therefore, there is the possibility that in the future, FMCS may refuse to refer a mediator to assist in an impasse pre-strike. MS. DEYOUNG stated if a mediator was not federally furnished, the Railroad Corporation would have to seek other mediation services. This would cost them money, as well as the Labor Relations Agency (LRA). She noted the LRA additional cost would be from having to set up a mediator referral service. HB 531 seeks to remove the requirement that the person who serves as a mediator, also must serve as the interest arbitrator. (REPRESENTATIVE ULMER and B. DAVIS returned at 9:35 a.m.) CHAIRMAN VEZEY pointed out that HB 531 is trying to comply with federal regulations. He stated a mediator should not serve as an interest arbitrator because it is contrary to the purpose of mediation. Number 652 STEVE SORENSON, MUSEUM COLLECTION ADVISORY COMMITTEE, commented on HB 531. He noted the MCAC is composed of members with expertise in archeology, anthropology, ethnology, and art. MCAC acts as a balance with the staff acquisition committee. He stated in his four years with the MCAC, they have turned down objects for acquisition because the purchase price was too high for the value received, the object did not fit in the collection, or the object was not of sufficient quality. He noted without the MCAC, those objects submitted for approval but turned down, might have been acquired by the museum. (REPRESENTATIVE SANDERS returned to the meeting at 9:38 a.m.) MR. SORENSON commented deaccessioning had not been very important in the past; however, with the National Repatriation Act recently passed by the federal government it would now be more readily used. Museums will now be involved in repatriating the object requests of various Native interests which they believe they have ownership or cultural interest in. Those deaccessions would also go before the MCAC. He mentioned the Alaska State Museum, in order to comply with the repatriation law, has devised that the artifact or object would remain in the possession of the museum, but the ownership would be transferred to the Native entity. He noted the museum would be the most likely to be able to preserve the artifacts or objects. MR. SORENSON questioned the cost figures given to the committee for the MCAC. TAPE 94-40, SIDE A Number 000 MR. SORENSON explained there is no cost for the review materials needed by the committee, other than the cost of duplication. He stated additional material is not developed unless the MCAC requests for additional research to be done. This is not often; however, it happens when the staff acquisition committee has not done the proper background work they should have. Most meetings are now done by teleconference. He felt the mandatory requirement that the MCAC meet in person should be removed. Sending out materials in advance and teleconferencing still facilitates good discussions and interaction. He noted although gifts undergo the same process, most are accepted. Some gifts are not accepted because they do not meet the criteria. Cost could be reduced by requiring meetings by teleconference. MCAC meets once every two months by teleconference. MCAC services are requested when offer deadlines to the museum must be met. He believed the process was efficient and cost saving. Because of the protection and additional expertise provided by the MCAC, he stated, it should not be eliminated. CHAIRMAN VEZEY clarified MCAC stood for the Museum Collection Advisory Committee. He returned to Juneau for testimony. Number 089 BEA SHEPARD, MEMBER, BOARD OF MUSEUMS ALASKA, FRIENDS OF THE ALASKA STATE MUSEUMS, opposed the elimination of the MCAC. She felt the MCAC was invaluable. She believed the costs presented to the committee were inaccurate and exaggerated. MCAC is a form of perfection not only for the museum, but also for the personnel. An advisory committee is knowledgeable about the needs and qualities of a collection, therefore when it makes the decisions it protects the members of the staff. MS. SHEPARD inquired how much it cost the staff to prepare for the committee. With HB 531 the staff would go through the same process internally, therefore she could not see how presenting the information to the MCAC was much more expensive. Research work is already being done by the museum. REPRESENTATIVE KOTT referred back to MR. SORENSON's testimony and asked if MS. SHEPARD felt it would be appropriate to eliminate the requirement for two face to face meetings every year. Number 154 MS. SHEPARD answered at least one meeting was valuable, but the rest could be done by teleconference. Number 159 REPRESENTATIVE KOTT asked how many members were on the MCAC and how often they met. Number 160 MS. SHEPARD replied five usually, but there are currently two vacancies. Nominees have been made and they are going to presently meet in Juneau. Number 168 REPRESENTATIVE KOTT clarified the membership comes from around the state. He asked if the meetings were generally in Juneau. Number 169 MS. SHEPARD answered yes, but the meetings are held in other areas as well as Juneau. Teleconferencing is common. Number 172 REPRESENTATIVE KOTT stated he was trying to determine the cost of the meetings. Three to five members meet twice a year around the state. Actual cost versus the benefit. Number 180 REPRESENTATIVE ULMER clarified MS. SHEPARD did not serve on the MCAC. MS. SHEPARD replied no, she was on the Board of Museums Alaska, an organization of all the museums in the state of Alaska. Number 187 REPRESENTATIVE ULMER clarified the Board of Museums Alaska supports the continuation of the MCAC. MS. SHEPARD affirmed REPRESENTATIVE ULMER. Number 195 KENNETH DEROUX, PREVIOUS MUSEUM CURATOR, EX-MEMBER MUSEUM COLLECTION ADVISORY COMMITTEE, commented on HB 531. As a museum staff member he found the MCAC to be frustrating, whereby it often involved unnecessary work with regard to overseeing acquisitions of $1000. He stated the $1,000 figure should be higher to reduce the paperwork. MR. DEROUX commented as a member of the MCAC, he had similar feelings. He did, however, find the value of the MCAC as it served the museum like a board of directors. The MCAC provides oversight to the museum staff members in establishing policies and procedures. He stated he has mixed feelings about HB 531 because there is a considerable amount of staff time spent on MCAC matters which could be better spent otherwise. MR. DEROUX focused on HB 531 where it allows deaccessioning of acquired items to be solely in the hands of the commissioner and director of the department. He stated this could be going in the wrong direction. He noted an example of directors who misuse their authority to gain money through deaccessions. With HB 531 the potential exists. REPRESENTATIVE ULMER stated she was considering proposing an amendment which would increase the minimum purchase approval requirement to possibly $5,000 and waive the requirement for face to face meetings. She asked his opinion. MR. DEROUX stated he would be in favor of REPRESENTATIVE ULMER's suggestions. He reminded the committee that they were not dealing with a lot of money. With a small acquisitions budget and little travel, he explained it sometimes was not worth the time spent. Progress would be made with a $5,000. The oversight committee is important; however, face to face meetings are not necessary. Number 272 REPRESENTATIVE KOTT asked if MR. DEROUX was in a legislative position, would he propose the elimination or the continuation of the MCAC. MR. DEROUX answered he would not propose the elimination without something to take its place. An administrative hierarchy would not work. He gave the staff credit for their expertise; however, they do not have enough power to be influential. In-house rules and regulations can be changed easily. Number 299 MR. SMITH clarified the point MR. DEROUX made on the oversight of deaccessioning. He had stated concerns about the oversight of deaccessioning an object from the collection ending up with the commissioner of Education. MR. SMITH noted elsewhere in law, the commissioner of Administration has oversight for all deaccessioning of materials. Therefore, even if the commissioner of Education decided something should be deaccessioned, it would then have to go to the commissioner of Administration for a final decision. Oversight exists in a different part of the law. CHAIRMAN VEZEY stated he would like to hold HB 531 in committee. Number 316 REPRESENTATIVE KOTT stated he did have an amendment to HB 531 if the chair would like to entertain it. Amend AS 23.30.005 to read: (a) The Alaska Workers' Compensation Board consists of a southern panel of three members sitting for the first judicial district, a northern panel of three members sitting for the second and fourth judicial district, three [TWO] southcentral panels of three members each sitting for the third judicial district, and one panel of three members that may sit in any judicial district. Each panel must include the commissioner, a representative of industry, and a representative of labor. The latter two members of each panel shall be appointed by the Governor and are subject to confirmation by a majority of the members of the legislature in joint session. REPRESENTATIVE KOTT explained the southcentral panels would be expanded to three. There would be no cost associated with the amendment. He stated presently, there is a delay in issuing Board D and Os, which are decisions and orders, and the attorneys of their clients are frustrated by this. The possibility exists that the state might soon be involved in a class action suit. In 1993, there were 350 decisions and orders issued, of which 44 were beyond the statutory 30- day limit. Another panel would be available to select from without any fiscal impact. Number 342 REPRESENTATIVE ULMER questioned if the majority of the delayed cases were in the southcentral region. Number 347 REPRESENTATIVE KOTT replied he was not sure, but he believed most of the backlog was in the southcentral region because a majority of the decisions and orders were issued from there. Number 351 MS. LEAF answered the Department of Labor feels that if another panel was added in southcentral, it would alleviate a substantial amount of the delay. The majority of the cases come out of that region. Number 362 REPRESENTATIVE KOTT moved to adopt amendment #1. Number 366 CHAIRMAN VEZEY asked the committee secretary to call the roll. IN FAVOR: REPRESENTATIVES VEZEY, KOTT, ULMER, B. DAVIS, G. DAVIS, SANDERS, OLBERG. MOTION PASSED CHAIRMAN VEZEY stated a committee substitute would be worked on and it would be brought back up in a week. Number 369 REPRESENTATIVE ULMER stated for purposes of preparing the committee substitute, she would like to see the changes they had been discussing regarding the MCAC. She questioned whether it might be better to vote now and roll the amendment into the committee substitute, or if limited CS should be prepared. It would save the committee a step if the vote was taken now and the CS could include it. REPRESENTATIVE ULMER stated the conceptual amendment would be to change the $1,000 requirement to $5,000 and it would remove the requirement that the MCAC meet face to face. Number 379 CHAIRMAN VEZEY stated the amendment would have to do more because if the board is dissolved the amendment is redundant. Number 382 REPRESENTATIVE ULMER explained the portions of HB 531 which remove the MCAC would be removed. It would be better to roll it into the CS they want prepared now, rather than have to prepare another CS if HB 531 passed. Number 390 CHAIRMAN VEZEY commented the amendment was not as simple as REPRESENTATIVE ULMER believed it was. He wanted to wait until the CS was before the committee in writing. Number 394 REPRESENTATIVE ULMER pointed out if the changes are done as an amendment versus a proposed CS, it will be more complicated because it will required yet another CS to be prepared. Number 399 REPRESENTATIVE G. DAVIS agreed with REPRESENTATIVE ULMER. A lot of sections would be deleted from HB 531, therefore it would be much smaller. Only a few sections would be included which relate to museums. CHAIRMAN VEZEY stated he wanted to see the proposal in writing. A committee substitute could be reviewed next Thursday. Number 408 REPRESENTATIVE KOTT inquired if someone from the museum could be recalled to comment on the conceptual amendment which would increase the purchase review amount to $5,000. MR. SMITH stated $5,000 would be acceptable. He said, anymore one does not purchase too many things under $5,000. Major purchases are always more than $5,000. Number 420 CHAIRMAN VEZEY clarified the change would not make a difference. MR. SMITH replied they feel they do have adequate controls to properly handle museum acquisitions and deaccessioning without a committee. He was in favor of both amendments. Not meeting face to face would reduce cost. Number 431 CHAIRMAN VEZEY asked what the museum's average acquisition cost is. Number 432 MR. SMITH answered an average is difficult to establish. One purchase of two pieces this year is about $25,000. Other years, there may be a number of pieces bought in the $2,000-4,000 range. Purchases vary from year to year because of what is on the market and what the museum needs. Number 438 CHAIRMAN VEZEY stated he understood there was not very much available in real collectibles under $5,000. Number 440 MR. SMITH agreed with CHAIRMAN VEZEY that for special things they would like to get his statement was true. He stated there are a number of items of historical importance or smaller ethnographic pieces that are under $5,000. Nice pieces are also received as gifts. HB 531 was held in committee. HB 530 - REQUIRED REPORTS OF STATE AGENCIES Number 449 CHAIRMAN VEZEY opened HB 530, sponsored by the Office of the Governor, for discussion. Number 452 LINDA REXWINKEL, OFFICE OF MANAGEMENT & BUDGET (OMB), addressed HB 530. She stated HB 530 is the culmination of a study by the OMB working with departments to identify annual reports which were either duplicative, unnecessary, or could be amended to biennial. She noted HB 530 reflects those reports the Governor is forwarding to the legislature for consideration of reporting requirement amendment or repeal. She noted the sectional analysis. HB 530 is an efficiency measure. Zero fiscal notes were provided by the departments. MS. REXWINKEL noted AS 43.56.018, subsection (c), a Department of Revenue report similar to those mentioned in Sections 16, 17, and 18, was inadvertently omitted from HB 530 in the drafting process. Number 466 CHAIRMAN VEZEY questioned what was omitted. Number 467 MS. REXWINKEL answered Section 16, 17, and 18, refer to reports by Department of Revenue which deal with education tax credits for the various taxes the department collects. Inadvertently, AS 43.56.018(c) amending the gas property tax, was omitted from HB 530. A letter from Department of Revenue should be in the packet requesting that section be included in the bill. Number 476 CHAIRMAN VEZEY stated he did not understand how oil and gas related to Sections 16, 17, and 18. Section 16, he commented, dealt with colleges and universities. Number 478 MS. REXWINKEL answered Sections 16, 17, and 18, repeal the annual reporting requirement by Department of Revenue to Legislative Budget & Audit on the income tax education credits taken under the Alaska Net Income Tax. She referred to page 2. The gas property tax was inadvertently omitted from the variety of income tax education credits which are reported by Department of Revenue. MS. REXWINKEL noticed the committee did not have the Department of Revenue letter and stated she would follow up on it. Number 502 CHAIRMAN VEZEY reiterated the intent of HB 530 and inquired if it would apply to mining operations. Number 506 MS. REXWINKEL replied Section 18, AS 43.65.018(c), is the statute citation which deals with mining. Number 509 CHAIRMAN VEZEY asked what Section 16 applied to. MS. REXWINKEL replied Section 16 applies to Alaska Net Income Tax Act. Other sections deal with the Alaska Oil & Gas Properties Production Taxes, Mining License Tax and Fisheries Tax, all of which have a reporting requirement to Legislative Budget & Audit from Department of Revenue on the education credit associated with those taxes. Number 516 CHAIRMAN VEZEY asked what the Alaska Net Income Tax Act (ANITA) was. MS. REXWINKEL responded she was unable to answer that question. She stated there are various taxes and filings required by businesses and ANITA was probably the corporate income tax. Number 524 CHAIRMAN VEZEY asked where on the sectional analysis was the section that had the inadvertent deletion. MS. REXWINKEL answered the section was not on the sectional analysis because the sectional analysis follows the bill. Another section should be included. Number 534 CHAIRMAN VEZEY stated the sectional analysis had just been received that morning; therefore, HB 530 would be held in committee for review until next week. CHAIRMAN VEZEY asked how much of HB 530 was house cleaning and how much was relaxing reporting requirements. (REPRESENTATIVE ULMER left the meeting at 10:14 a.m.) Number 543 MS. REXWINKEL answered HB 530 was meant to be house keeping measures. The reports were placed into statute prior to current budgetary provisions and/or under different organizational structures. Therefore, either the committees or commissions are not functioning, and/or the information is duplicative. HB 530 is not intended to relax reporting requirements. The Governor thought the information was fully available. Number 552 CHAIRMAN VEZEY questioned the opinion of the Legislative Budget & Audit. MS. REXWINKEL stated she was not aware of it. Number 563 REPRESENTATIVE KOTT clarified the costs in the right column of the sectional analysis were savings. Number 564 MS. REXWINKEL affirmed REPRESENTATIVE KOTT. She stated those costs are what the departments current project is the cost of producing those reports, and the amount of money they would save if the reports were not done. She noted the zero fiscal notes and stated most of the dollars are very nominal, therefore the departments would not have produced a fiscal note in the first place to receive additional moneys to produce those reports. It is not anticipated the departments budgets will be reduced by the nominal figures. Number 572 CHAIRMAN VEZEY commented he had seen nothing but zero fiscal notes. MS. REXWINKEL stated some of the fiscal notes may include in the analysis section a detailed list of the nominal amounts. Number 577 REPRESENTATIVE KOTT clarified he was referring to the sectional analysis. MS. REXWINKEL stated HB 530 is meant to be noncontroversial. The Governor's Office worked very hard to pick innocuous reports to eliminate controversy. Number 587 CHAIRMAN VEZEY asked the committee to review the sectional analysis before the meeting on Thursday; action on HB 530 might be possible. ADJOURNMENT CHAIRMAN VEZEY adjourned the meeting at 10:19 a.m.