Legislature(1995 - 1996)

04/11/1996 08:10 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
             HOUSE STATE AFFAIRS STANDING COMMITTEE                            
                         April 11, 1996                                        
                           8:10 a.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Jeannette James, Chair                                         
 Representative Scott Ogan, Vice Chair                                         
 Representative Joe Green                                                      
 Representative Ivan Ivan                                                      
 Representative Brian Porter                                                   
 Representative Caren Robinson                                                 
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 Representative Ed Willis                                                      
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 HOUSE BILL NO. 416                                                            
 "An Act relating to fees or assessment of costs for certain                   
 services provided by state government, including hearing costs                
 related to the real estate surety fund; fees for authorization to             
 operate a postsecondary educational institution or for an agent's             
 permit to perform services for a postsecondary educational                    
 institution; administrative fees for self-insurers in workers'                
 compensation; business license fees; fees for activities related to           
 coastal zone management, training relating to emergency management            
 response, regulation of  pesticides and broadcast chemicals, and              
 subdivision plans for sewage waste disposal or treatment; and                 
 providing for an effective date."                                             
                                                                               
      - PASSED CSHB 416(STA) OUT OF COMMITTEE                                  
                                                                               
 HOUSE BILL NO. 482                                                            
 "An Act relating to state procurement practices and procedures; and           
 providing for an effective date."                                             
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 HOUSE BILL NO. 136                                                            
 "An Act mandating the sale of the Alaska Railroad; and providing              
 for an effective date."                                                       
                                                                               
      - WAIVED OUT OF COMMITTEE                                                
                                                                               
 HOUSE BILL NO. 198                                                            
 "An Act relating to absences from the state and eligibility for               
 permanent fund dividends; and providing for an effective date."               
                                                                               
      - PASSED CSHB 198(STA) OUT OF COMMITTEE                                  
                                                                               
 HOUSE BILL NO. 546                                                            
 "An Act providing for and relating to the issuance of general                 
 obligation bonds in the amount of $600,211,000 for the purpose of             
 paying the cost of acquiring, constructing, reconstructing, and               
 equipping public schools and of repair and major maintenance of               
 public school and University of Alaska facilities; and providing              
 for an effective date."                                                       
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 * HOUSE BILL NO. 545                                                          
 "An Act relating to the cost-of-living differential for certain               
 public employees residing in the state and the criteria for                   
 determining eligibility for the differential; and providing for an            
 effective date."                                                              
                                                                               
      - SCHEDULED BUT NOT HEARD                                                
                                                                               
 HOUSE JOINT RESOLUTION NO. 34                                                 
 Proposing an amendment to the Constitution of the State of Alaska             
 relating to the duration of a regular session.                                
                                                                               
      - SCHEDULED BUT NOT HEARD                                                
                                                                               
 (* First public hearing)                                                      
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HB 416                                                               
 SHORT TITLE: OMNIBUS STATE FEES & COST ASSESSMENTS                            
 SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR                                  
                                                                               
 JRN-DATE      JRN-PG            ACTION                                        
 01/12/96      2432    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/12/96      2432    (H)   STATE AFFAIRS, L&C, RESOURCES, FINANCE            
 01/12/96      2432    (H)   7 FNS (DCED, 2-DEC, 2-GOV, LABOR, MLV)            
 01/12/96      2432    (H)   FISCAL NOTE (REV)                                 
 01/12/96      2433    (H)   GOVERNOR'S TRANSMITTAL LETTER                     
 04/09/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 04/09/96              (H)   MINUTE(STA)                                       
 04/11/96              (H)   STA AT  8:00 AM CAPITOL 102                       
                                                                               
 BILL:  HB 482                                                               
 SHORT TITLE: STATE PROCUREMENT PRACTICES & PROCEDURES                         
 SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR                                  
                                                                               
 JRN-DATE      JRN-PG            ACTION                                        
 02/09/96      2686    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/09/96      2686    (H)   L&C, STATE AFFAIRS, FINANCE                       
 02/09/96      2687    (H)   2 FISCAL NOTES (ADM, DOT)                         
 02/09/96      2687    (H)   5 ZERO FNS (2-ADM, DCED, DCRA, CORR)              
 02/09/96      2687    (H)   5 ZERO FNS (DOE, DEC, F&G, GOV, DHSS)             
 02/09/96      2687    (H)   5 ZERO FNS (LABOR, LAW, DMVA, DNR, DPS)           
 02/09/96      2687    (H)   2 ZERO FNS (REV, UA)                              
 02/09/96      2687    (H)   GOVERNOR'S TRANSMITTAL LETTER                     
 03/18/96              (H)   L&C AT  3:00 PM CAPITOL 17                        
 03/20/96              (H)   L&C AT  3:00 PM CAPITOL 17                        
 03/20/96              (H)   MINUTE(L&C)                                       
 03/22/96              (H)   L&C AT  3:00 PM CAPITOL 17                        
 03/28/96      3429    (H)   L&C RPT  CS(L&C) 1DP 5NR 1AM                      
 03/28/96      3429    (H)   DP: KUBINA                                        
 03/28/96      3429    (H)   NR: KOTT, SANDERS, MASEK, PORTER                  
 03/28/96      3429    (H)   NR: ROKEBERG                                      
 03/28/96      3429    (H)   AM: ELTON                                         
 03/28/96      3429    (H)   2 FISCAL NOTES (ADM, DOT) 2/9/96                  
 03/28/96      3430    (H)   4 ZERO FNS (2-ADM, DCED, DCRA) 2/9/96             
 03/28/96      3430    (H)   4 ZERO FNS (COR, ED, DEC, F&G) 2/9/96             
 03/28/96      3430    (H)   3 ZERO FNS (GOV, DHSS, LABOR) 2/9/96              
 03/28/96      3430    (H)   4 ZERO FNS (LAW, MVA, DNR, DPS) 2/9/96            
 03/28/96      3430    (H)   2 ZERO FNS (REV, UA) 2/9/96                       
 03/28/96      3430    (H)   REFERRED TO STA                                   
 04/09/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 04/09/96              (H)   MINUTE(STA)                                       
 04/11/96              (H)   STA AT  8:00 AM CAPITOL 102                       
                                                                               
 BILL:  HB 136                                                               
 SHORT TITLE: MANDATE SALE OF ALASKA RAILROAD                                  
 SPONSOR(S): REPRESENTATIVE(S) MARTIN                                          
                                                                               
 JRN-DATE      JRN-PG            ACTION                                        
 01/30/95       174    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/30/95       174    (H)   TRA, STA, FIN                                     
 04/03/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
 04/03/96              (H)   MINUTE(TRA)                                       
 04/10/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
 04/11/96              (H)   STA AT  8:00 AM CAPITOL 102                       
                                                                               
 BILL:  HB 198                                                               
 SHORT TITLE: PFD ALLOWABLE ABSENCES                                           
 SPONSOR(S): REPRESENTATIVE(S) ELTON, Robinson, Davies                         
                                                                               
 JRN-DATE      JRN-PG            ACTION                                        
 02/27/95       487    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/27/95       487    (H)   STATE AFFAIRS, JUDICIARY, FINANCE                 
 03/28/96              (H)   STA AT  8:15 AM CAPITOL 102                       
 03/28/96              (H)   MINUTE(STA)                                       
 04/04/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 04/04/96              (H)   MINUTE(STA)                                       
 04/09/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 04/09/96              (H)   MINUTE(STA)                                       
 04/11/96              (H)   STA AT  8:00 AM CAPITOL 102                       
                                                                               
 BILL:  HB 546                                                               
 SHORT TITLE: G.O. BONDS: SCHOOLS & UNIV.                                      
 SPONSOR(S): STATE AFFAIRS                                                     
                                                                               
 JRN-DATE      JRN-PG            ACTION                                        
 03/22/96      3270    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/22/96      3270    (H)   STA, HES, FINANCE                                 
 03/26/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 03/26/96              (H)   MINUTE(STA)                                       
 04/04/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 04/04/96              (H)   MINUTE(STA)                                       
 04/09/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 04/09/96              (H)   MINUTE(STA)                                       
 04/11/96              (H)   STA AT  8:00 AM CAPITOL 102                       
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 NANCY SLAGLE, Director                                                        
 Budget Review                                                                 
 Office of Management and Budget                                               
 Office of the Governor                                                        
 P.O. Box 110020                                                               
 Juneau, Alaska 99811-0020                                                     
 Telephone:  (907) 465-4699                                                    
  POSITION STATEMENT:   Presented HB 416.                                      
                                                                               
 PAUL GROSSI, Director                                                         
 Central Office                                                                
 Division of Workers' Compensation                                             
 Department of Labor                                                           
 P.O. Box 25512                                                                
 Juneau, Alaska 99802-5512                                                     
 Telephone:  (907) 465-2790                                                    
  POSITION STATEMENT:   Provided testimony on HB 416.                          
                                                                               
 JANICE ADAIR, Director                                                        
 Division of Environmental Health                                              
 Department of Environmental Conservation                                      
 555 Cordova Street                                                            
 Anchorage, Alaska 99501                                                       
 Telephone:  (907) 269-7644                                                    
  POSITION STATEMENT:   Provided testimony on HB 416.                          
                                                                               
 JULES TILESTON, Director                                                      
 Central Office                                                                
 Division of Mining and Water Management                                       
 Department of Natural Resources                                               
 3601 "C" Street, Suite 800                                                    
 Anchorage, Alaska 99503-5935                                                  
 Telephone:  (907) 762-2163                                                    
  POSITION STATEMENT:   Provided testimony on HB 416.                          
                                                                               
 SAM KITO III, Legislative Liaison/Special Assistant                           
 Office of the Commissioner                                                    
 Department of Transportation and Public Facilities                            
 3132 Channel Drive                                                            
 Juneau, Alaska 99801-7898                                                     
 Telephone:  (907) 465-3904                                                    
  POSITION STATEMENT:   Provided testimony on HB 416.                          
                                                                               
 CATHERINE REARDON, Director                                                   
 Central Office                                                                
 Division of Occupational Licensing                                            
 Department of Commerce and Economic Development                               
 P.O. Box 110806                                                               
 Juneau, Alaska 99811-0806                                                     
 Telephone:  (907) 465-2534                                                    
  POSITION STATEMENT:   Provided testimony on HB 416.                          
                                                                               
 RICK BROWN, Platting Officer                                                  
 Matanuska-Susitna Borough                                                     
 350 Dahlia                                                                    
 Palmer, Alaska 99645                                                          
 Telephone:  (907) 745-4801                                                    
  POSITION STATEMENT:   Provided testimony on HB 416.                          
                                                                               
 DUGAN PETTY, Director                                                         
 Central Office                                                                
 Division of General Services                                                  
 Department of Administration                                                  
 P.O. Box 110210                                                               
 Juneau, Alaska 99811-0210                                                     
 Telephone:  (907) 465-2250                                                    
  POSITION STATEMENT:   Presented HB 482.                                      
                                                                               
 DAVE GERKE                                                                    
 1265 Norman Street, Number 2                                                  
 Anchorage, Alaska 99504                                                       
 Telephone:  (907) 337-4657                                                    
  POSITION STATEMENT:   Provided testimony on HB 482.                          
                                                                               
 REPRESENTATIVE KIM ELTON                                                      
 Alaska State Legislature                                                      
 State Capitol, Room 112                                                       
 Juneau, Alaska 99801-1182                                                     
 Telephone:  (907) 465-4947                                                    
  POSITION STATEMENT:   Presented committee substitute for HB 198.             
                                                                               
 ROSS PERRINE                                                                  
 P.O. Box 4031                                                                 
 Palmer, Alaska 99645                                                          
 Telephone:  (907) 746-6443                                                    
  POSITION STATEMENT:   Provided testimony on HB 198.                          
                                                                               
 NANCI JONES, Director                                                         
 Central Office                                                                
 Permanent Fund Dividend Program                                               
 Department of Revenue                                                         
 P.O. Box 110460                                                               
 Juneau, Alaska 99811-0460                                                     
 Telephone:  (907) 465-2323                                                    
  POSITION STATEMENT:   Provided testimony on HB 198.                          
                                                                               
 GEORGE REICHMAN                                                               
 P.O. Box 403                                                                  
 Glennallen, Alaska 99588                                                      
 Telephone:  (907) 822-3528                                                    
  POSITION STATEMENT:   Provided testimony on HB 198.                          
                                                                               
 DONALD EVANS, Superintendent                                                  
 Southwest Region School District                                              
 P.O. Box 90                                                                   
 Dillingham, Alaska 99576                                                      
 Telephone:  (907) 842-5287                                                    
  POSITION STATEMENT:   Provided testimony on HB 546.                          
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 96-49, SIDE A                                                            
 Number 0015                                                                   
                                                                               
 The House State Affairs Committee was called to order by Chair                
 Jeannette James at 8:10 a.m.  Members present at the call to order            
 were Representatives Ivan, Ogan, Robinson and James.  Members                 
 absent were Representatives Green, Porter and Willis.                         
                                                                               
 The record reflected the arrival of Representative Joe Green at               
 8:12 a.m.                                                                     
                                                                               
 The record reflected the arrival of Representative Brian Porter at            
 8:15 a.m.                                                                     
                                                                               
 HB 416 - OMNIBUS STATE FEES & COST ASSESSMENTS                              
                                                                               
 The first order of business to come before the House State Affairs            
 Committee was HB 416.                                                         
                                                                               
 CHAIR JEANNETTE JAMES called on Nancy Slagle, Office of the                   
 Governor, to present the bill.                                                
                                                                               
 Number 0081                                                                   
                                                                               
 NANCY SLAGLE, Director, Budget Review, Office of Management and               
 Budget, Office of the Governor, thanked the committee members for             
 hearing HB 416 again.  She stated it was an intricate part of the             
 Governor's budget plan.  The bill provided for the charging of fees           
 for certain services within state government.  She said she would             
 explain the various sections of the bill and representatives from             
 the departments were here to answer any questions.                            
                                                                               
 Number 0145                                                                   
                                                                               
 MS. SLAGLE explained Section 1 addressed the real estate surety               
 fund.  It allowed the Department of Commerce and Economic                     
 Development (DCED) to charge for the cost of a claim hearing for              
 the real estate surety fund.  It also allowed the state to free               
 some general fund dollars.  It was a small amount, however.  The              
 section was also supported by the industry.                                   
                                                                               
 Number 0197                                                                   
                                                                               
 REPRESENTATIVE JOE GREEN asked Ms. Slagle if Section 1 impacted the           
 problems with the dedicated funds adversely?                                  
                                                                               
 Number 0206                                                                   
                                                                               
 MS. SLAGLE replied, "no."  Section 1 allowed the DCED to charge the           
 cost of the hearing against the surety fund.  It was not dedicated            
 for a specific purpose.  In the past the ability did not exist for            
 the department.                                                               
                                                                               
 Number 0247                                                                   
                                                                               
 REPRESENTATIVE GREEN said other revenue enhancing fees could not be           
 dedicated.  The money was put into the general fund and then                  
 budgeted back out.  Section 1 sounded like a specific dedicated               
 fund.                                                                         
                                                                               
 Number 0286                                                                   
                                                                               
 MS. SLAGLE replied Section 1 actually broadened the purpose of the            
 fund.                                                                         
                                                                               
 REPRESENTATIVE GREEN asked Ms. Slagle if the fund would have to be            
 budgeted annually?                                                            
                                                                               
 MS. SLAGLE replied, "yes."                                                    
                                                                               
 Number 0299                                                                   
                                                                               
 CHAIR JAMES asked Ms. Slagle where the fund came from?                        
 Number 0305                                                                   
                                                                               
 MS. SLAGLE replied a representative from the department was here to           
 answer that question.                                                         
                                                                               
 CHAIR JAMES suggested moving forward instead.  She would ask the              
 question again later.                                                         
                                                                               
 Number 0316                                                                   
                                                                               
 MS. SLAGLE moving forward, explained Section 2 allowed the Alaska             
 Commission on Postsecondary Education (ACPE) to charge fees for               
 processing educational institutions' applications for authorization           
 to operate, along with application fees for the institutions' agent           
 permits.                                                                      
                                                                               
 Number 0393                                                                   
                                                                               
 CHAIR JAMES asked Ms. Slagle where the money for the ACPE came                
 from?                                                                         
                                                                               
 Number 0410                                                                   
                                                                               
 MS. SLAGLE replied a large portion of its' budget came from the               
 loan processing, the student loan portion of the corporation.  The            
 principle interest that was generated from the revolving loan funds           
 was used to support the corporation.  Section 2 would allow the               
 commission to charge a fee for the other portion of its                       
 responsibility so that a corporate receipt would not be used.                 
                                                                               
 Number 0466                                                                   
                                                                               
 CHAIR JAMES asked Ms. Slagle if the ACPE would collect fees from              
 the University of Alaska?                                                     
                                                                               
 Number 0476                                                                   
                                                                               
 MS. SLAGLE replied, "no."  It would collect fees from other private           
 types of institutions, such as, vocational schools.  It did not               
 affect postsecondary education.                                               
                                                                               
 Number 0511                                                                   
                                                                               
 CHAIR JAMES said she was concerned about moving the money from one            
 hand to the other.  She stated, if a fee was going to be charged,             
 it should generate new money.                                                 
                                                                               
 MS. SLAGLE agreed with Chair James.  She explained Section 2 would            
 be a new fee for the state.                                                   
                                                                               
 Number 0539                                                                   
                                                                               
 MS. SLAGLE moving forward, explained Section 3 would authorize the            
 State Commission for Human Rights to establish and charge fees for            
 education, training services, information, and materials the                  
 commission provided to the public.                                            
                                                                               
 Number 0592                                                                   
                                                                               
 CHAIR JAMES asked Ms. Slagle if this was new money?                           
                                                                               
 MS. SLAGLE replied, "yes."                                                    
                                                                               
 CHAIR JAMES wondered if the fee for a training service would apply            
 to a state agency.                                                            
                                                                               
 Number 0618                                                                   
                                                                               
 MS. SLAGLE replied the section did not apply to services provided             
 to another state agency.  This applied to the private industry                
 only.                                                                         
                                                                               
 Number 0632                                                                   
                                                                               
 REPRESENTATIVE CAREN ROBINSON said the State Commission for Human             
 Rights just came to Juneau for a two day training for the Juneau              
 Economic Development Council that brought together several private            
 businesses.  She further stated she knew the commission provided              
 several weeks of training for the Marine Highway System employees.            
 She was not sure if the commission should not charge state                    
 agencies.  She understood, however, it was directed at the private            
 industry that demanded days of training, when at this point the               
 only expense covered was travel.                                              
                                                                               
 Number 0677                                                                   
                                                                               
 CHAIR JAMES replied the transfer of money from one account to                 
 another did not help the state gain anything.                                 
                                                                               
 Number 0709                                                                   
                                                                               
 REPRESENTATIVE ROBINSON replied she agreed with Chair James.                  
 However, she also believed it was fair to help support the cost of            
 the staff person absent for long training periods.                            
                                                                               
 Number 0744                                                                   
                                                                               
 CHAIR JAMES said she understood the transfer of authority across              
 state agency lines.  However, HB 416 was intended to produce                  
 revenue.  Furthermore, it was also a budget decision.  The                    
 legislature needed to determine if it wanted to fund agencies that            
 provided these types of services.                                             
                                                                               
 MS. SLAGLE said the budget process did allow for transfers between            
 agencies.                                                                     
                                                                               
 CHAIR JAMES said she understood the concept of the transfer between           
 agencies.  She reiterated it was part of the budget process and               
 should be dealt with there and not in HB 416.                                 
                                                                               
 Number 0862                                                                   
                                                                               
 MS. SLAGLE moving forward, explained Section 4 would establish an             
 administrative fee for self-insured employers under the Alaska                
 Workers' Compensation Act.  Most employers currently paid a portion           
 of the cost of running the state workers' compensation program                
 through their insurance premium tax.  Self-insured employers,                 
 however, were receiving the same state services but were not                  
 currently contributing to the cost of running the system.  The                
 section would provide for a share in that cost.                               
                                                                               
 Number 0921                                                                   
                                                                               
 REPRESENTATIVE BRIAN PORTER asked Ms. Slagle if Section 4 would               
 include municipalities?                                                       
                                                                               
 Number 0930                                                                   
                                                                               
 MS. SLAGLE replied, as written, "yes."  It would also include                 
 private firms and school districts.                                           
                                                                               
 Number 0949                                                                   
                                                                               
 REPRESENTATIVE PORTER asked Ms. Slagle if she had a figure amount             
 for the municipalities?                                                       
                                                                               
 Number 0958                                                                   
                                                                               
 MS. SLAGLE replied it dropped approximately $300,000.  She called             
 on Paul Grossi, Department of Labor, to address the issue further.            
                                                                               
 Number 0991                                                                   
                                                                               
 PAUL GROSSI, Director, Central Office, Division of Workers'                   
 Compensation, Department of Labor, referred the committee members             
 to a handout titled, "1994 Self-insured WC Payments at 4% by Year."           
 He explained the companies would have paid the amount in the second           
 column.                                                                       
                                                                               
 Number 1050                                                                   
                                                                               
 REPRESENTATIVE PORTER said, therefore, the budget for the                     
 Municipality of Anchorage would be affected by about $86,000.                 
                                                                               
 Number 1055                                                                   
                                                                               
 MR. GROSSI replied, "right."  It would fluctuate from year to year,           
 however, because it depended on the amount of claims processed.               
                                                                               
 Number 1066                                                                   
                                                                               
 CHAIR JAMES said these are big numbers.  She asked Ms. Slagle to              
 continue.                                                                     
                                                                               
 Number 1074                                                                   
                                                                               
 MS. SLAGLE moving forward, explained Section 5 would change the               
 biennial fee for a business license from $50 to $75.  This would              
 mark the first fee increase since statehood.                                  
                                                                               
 Number 1112                                                                   
                                                                               
 CHAIR JAMES said that was a narrow increase.  Furthermore, the                
 House State Affairs Committee discussed earlier surrounding another           
 piece of legislation the Department of Commerce and Economic                  
 Development should provide more information to individuals that               
 applied for a business license.  She suggested thinking about the             
 amount further.  She was not sure if $75 was enough.  It depended             
 on the services provided, however.                                            
                                                                               
 Number 1192                                                                   
                                                                               
 MS. SLAGLE moving forward, explained Section 6 would provide the              
 Division of Governmental Coordination in the Office of the Governor           
 to adopt regulations to charge for services related to federal                
 consistency determinations and certifications under the Coastal               
 Zone Management Act.  The fees charged were intended to speed up              
 the process.                                                                  
                                                                               
 Number 1261                                                                   
                                                                               
 REPRESENTATIVE GREEN said any industry in an effort to help move              
 that would favor Section 6.  He asked Ms. Slagle, if the language             
 on page 3, line 15, "may adopt regulations to charge fees for                 
 services provided," would go beyond the cost of the permit?  For              
 example, if there were 10 permits, could the division divide its              
 total operating cost by one-tenth, and charge that amount.                    
                                                                               
 Number 1311                                                                   
                                                                               
 MS. SLAGLE replied, "I guess if you were really stretching it, you            
 probably could."  It was not the intent of HB 416, however.                   
                                                                               
 MS. SLAGLE moving forward, explained Section 7 would authorize the            
 Department of Military and Veterans' Affairs to adopt regulations             
 setting reasonable fees for classes and seminars on emergency                 
 response procedures.  The department right now could charge fees              
 for spill response training only.  She explained the fee charged              
 would be small.  It would only cover the cost of transportation or            
 meeting facilities, for example.                                              
                                                                               
 Number 1368                                                                   
                                                                               
 MS. SLAGLE moving forward, explained Section 8 would authorize the            
 Department of Environmental Conservation (DEC) to adopt regulations           
 setting fees for the regulation of pesticides and broad case                  
 chemicals and for the review of subdivision plans for sewage waste            
 disposal or treatment.  The fees would provide funding for the                
 technical staff employed to provide those services.                           
                                                                               
 Number 1405                                                                   
                                                                               
 REPRESENTATIVE IVAN IVAN asked if the DEC currently had technical             
 staff on board, or did it contract those services?                            
                                                                               
 Number 1425                                                                   
                                                                               
 MS. SLAGLE said Janice Adair, Department of Environmental                     
 Conservation, was available via teleconference to answer that                 
 question.                                                                     
                                                                               
 Number 1436                                                                   
                                                                               
 JANICE ADAIR, Director, Division of Environmental Health,                     
 Department of Environmental Conservation, said Section 8 would                
 provide funds for existing staff and services.  It would replace              
 general fund money as indicated in the fiscal note.                           
                                                                               
 Number 1451                                                                   
                                                                               
 REPRESENTATIVE SCOTT OGAN said HB 416 allowed taxation through                
 regulation.  He suggested reducing regulations and called for a               
 vote of the people.                                                           
                                                                               
 Number 1517                                                                   
                                                                               
 MS. SLAGLE replied regulations were adopted to respond to and to              
 implement laws.  Furthermore, the Administration was looking at               
 streamlining regulations.  She cited the bill that recently passed            
 out of the House State Affairs Committee that addressed this issue.           
                                                                               
 Number 1557                                                                   
                                                                               
 CHAIR JAMES said she agreed with the concerns of Representative               
 Ogan.  The legislature also played a part in this concern as the              
 law making body of the government.  Regulations were used to                  
 implement statutes, and statutes needed to be changed.  The budget            
 process was also a big concern of hers.  She agreed with reducing             
 state spending, but suggested looking at the services first to                
 determine which ones werereally needed.                                       
                                                                               
 CHAIR JAMES announced she was disappointed that no one from the               
 public or the industry was here to testify today on HB 416.  She              
 was concerned about the reaction of the public.  She wondered if              
 anybody even knew about the bill.                                             
                                                                               
 Number 1654                                                                   
                                                                               
 REPRESENTATIVE IVAN said he concurred with Representative Ogan's              
 view of HB 416 as taxation by regulation.  He was further concerned           
 about the consumers not having an opportunity to question the                 
 amount.  There was a public hearing process, if the fees were                 
 adopted by statute.  He believed that was a better process.                   
                                                                               
 Number 1684                                                                   
                                                                               
 CHAIR JAMES replied there was a public process outlined in the                
 Administrative Procedures Act (APA).  However, the public was not             
 aware usually until after they "paid the bill."  Therefore, it was            
 a responsibility of the legislature to help "tune in the public."             
 She was thankful for Gavel-to-Gavel and the exposure it provided to           
 inform more people.                                                           
                                                                               
 Number 1728                                                                   
                                                                               
 REPRESENTATIVE ROBINSON said, if this was an issue for everybody,             
 she suggested notifying the different groups that would be affected           
 through the House State Affairs Committee.  Furthermore, she also             
 believed this issue was a policy decision that the legislature                
 needed to address.  The legislature needed to decide if a business            
 license was necessary, for example.  If it decided that a license             
 was necessary, then it needed to ensure that the cost of providing            
 that service was funded through the license fee.                              
                                                                               
 Number 1789                                                                   
                                                                               
 REPRESENTATIVE OGAN said he was not willing to make a policy                  
 decision to give the authority to regulators to tax.  He felt it              
 was inappropriate.  If a tax was needed, he suggested letting the             
 people vote on it.  He reiterated he did not want to give a                   
 regulatory agency the authority to tax.  He said, "I think we all             
 know what will happen."                                                       
                                                                               
 Number 1818                                                                   
                                                                               
 MS. SLAGLE stated several of the provisions in the bill were set by           
 statute at a specific amount.  Furthermore, the bill was trying to            
 cover the cost of providing a service.  In most instances the                 
 consumer was willing to pay more to insure that he received the               
 services expected from the state.  This was especially true of the            
 boards and commissions.                                                       
                                                                               
 Number 1878                                                                   
                                                                               
 CHAIR JAMES said there was a difference, however, for the                     
 municipalities as their municipal assistance and revenue sharing              
 were cut and their fees were increased.  That was where the most              
 complaints would come from.  She cited the coastal zone management            
 issue.  She believed the users would be willing to give some money            
 to get it done.  The performance would have to match the fee,                 
 however.                                                                      
                                                                               
 Number 1930                                                                   
                                                                               
 MS. SLAGLE explained there were two amendments that needed to be              
 presented.  The first dealt with the Department of Natural                    
 Resources (DNR).  The second dealt with the Department of                     
 Transportation and Public Facilities.  She announced there were               
 representatives from each department to answer any questions.                 
                                                                               
 MS. SLAGLE explained Amendment 1 allowed the DNR to charge a fee              
 for the direct cost of evaluating or auditing an application for              
 the exploration credits for mine development.                                 
                                                                               
 Number 2032                                                                   
                                                                               
 CHAIR JAMES said a fee that was established by DNR in 1993 or 1994            
 was very distressing to her constituents.  She explained her                  
 constituents wanted to fill a ditch on wetlands.  They could not              
 fill it without a $500 application fee.  The ditch still existed              
 because they believed the application fee was too much.  It was not           
 worth it.  This was what made people hate government.                         
                                                                               
 Number 2125                                                                   
                                                                               
 JULES TILESTON, Director, Central Office, Division of Mining and              
 Water Management, Department of Natural Resources, said the                   
 proposed amendment had the support of the industry including the              
 fees.  Furthermore, the amendment would allow the Commissioner to             
 review and approve applications.                                              
                                                                               
 Number 2221                                                                   
                                                                               
 REPRESENTATIVE ROBINSON asked if this was the same amendment that             
 Representative Richard Foster proposed for the underground mining             
 bill on the floor of the House of Representatives?                            
                                                                               
 Number 2231                                                                   
                                                                               
 MR. TILESTON replied, "that's affirmative."                                   
                                                                               
 Number 2234                                                                   
                                                                               
 REPRESENTATIVE OGAN said he wanted to hear directly from the                  
 industry that it supported the amendment and the fees.  He                    
 suggested another hearing.                                                    
                                                                               
 Number 2266                                                                   
                                                                               
 MS. SLAGLE explained Amendment 2 allowed the Department of                    
 Transportation and Public Facilities to charge for the use of state           
 marine or harbor facilities, and required municipalities that lease           
 them to charge a comparable fee.  It would not generate money for             
 the state, but it would generate more money for the municipalities.           
                                                                               
 Number 2296                                                                   
                                                                               
 SAM KITO III, Legislative Liaison/Special Assistant, Office of the            
 Commissioner, Department of Transportation and Public Facilities,             
 stated the proposed amendment was part of a bill the department               
 introduced several years ago.  He explained the state of Alaska               
 owned close to 100 harbors and had operating agreements with 84 of            
 those harbors and residing municipalities.  The agreements required           
 the municipalities to recover the cost associated with the                    
 operation of the harbor while the state of Alaska was responsible             
 for the deferred maintenance.  The deferred maintenance                       
 responsibility was approaching $26 million, however.  Therefore,              
 the amendment would permit the department to require a municipality           
 to take into account the replacement cost when charging a user fee,           
 and to direct that money into a separate account to allow the                 
 municipalities to take care of the deferred maintenance themselves.           
 The department did not see another method without an increase in              
 the fuel tax or a dedication of the fuel tax to take care of this             
 deferred maintenance problem.                                                 
                                                                               
 Number 2354                                                                   
                                                                               
 REPRESENTATIVE GREEN said he had a problem with the language.  He             
 read, "At minimum, the fees may not be less than...."  He called it           
 a blank check.                                                                
                                                                               
 Number 2372                                                                   
                                                                               
 MR. KITO III replied there was a minimum charge per lineal foot of            
 moorage space, about $2 per foot, per year.  However, some                    
 municipalities had not reached that level.  The department                    
 encouraged them to reach that level in order to recover some of               
 their operating costs.  Otherwise, they were subsidized by the                
 local municipality to operate that harbor.  Furthermore, the                  
 department did not have the authority to ask a municipality to                
 charge more to take care of the deferred maintenance.  Therefore,             
 the amendment would help alleviate some of the deferred maintenance           
 concerns of the department.  There were many facilities that were             
 in dire need of work to adequately perform for the public.                    
                                                                               
 Number 2419                                                                   
                                                                               
 REPRESENTATIVE GREEN wondered if the minimum would be enough to               
 offset the deferred maintenance.                                              
                                                                               
 Number 2448                                                                   
                                                                               
 MR. KITO III replied a minimum existed now that was not enough to             
 take care of the deferred maintenance needs.  The amendment would             
 give the department the authority to request that the                         
 municipalities charge more for the moorage rate so that they could            
 recover the maintenance and replacement cost of the harbor                    
 facility.                                                                     
                                                                               
 Number 2464                                                                   
                                                                               
 REPRESENTATIVE PORTER wondered if the state was responsible for the           
 deferred maintenance.                                                         
                                                                               
 MR. KITO III replied, "yes."  The state was responsible through               
 contract for the deferred maintenance of the facilities.                      
                                                                               
 Number 2474                                                                   
                                                                               
 REPRESENTATIVE PORTER said he wondered what mechanism would shift             
 the responsibility from the state to the municipality.  He realized           
 it would be through the contract based on Mr. Kito's response.                
                                                                               
 Number 2477                                                                   
                                                                               
 CHAIR JAMES said the deferred maintenance problem for the                     
 Department of Transportation and Public Facilities was an example             
 of the deferred maintenance problem for the state.                            
                                                                               
 TAPE 96-49, SIDE B                                                            
 Number 0000                                                                   
                                                                               
 CHAIR JAMES further said everyone agreed and recognized that on-              
 going maintenance and repairs were needed, but the cost was                   
 considered too high.  In some cases something new was built instead           
 of dealing with the deferred maintenance.  The issue was not being            
 addressed.  She was not sure if the amendment would solve the                 
 problem, however.  It would solve a little bit of the problem, but            
 not the big problem.                                                          
                                                                               
 Number 0032                                                                   
                                                                               
 MR. KITO III said Chair James was correct.  The deferred                      
 maintenance was increasing.  The department had not been built a              
 new facility since 1983, however.                                             
                                                                               
 CHAIR JAMES said she understood that the department had not built             
 a new facility while the old had not been taken care of.  That was            
 not the case statewide, however.                                              
                                                                               
 Number 0049                                                                   
                                                                               
 REPRESENTATIVE GREEN said he was still concerned that the fee would           
 not be confined to maintenance.  He cited the University of Alaska            
 included maintenance in its' budget but never actually used the               
 money for maintenance.  He wondered if there was any assurance that           
 a municipality would use the fees accordingly.                                
                                                                               
 Number 0078                                                                   
                                                                               
 MR. KITO III replied he was not sure if the department could                  
 mandate a municipality to use the money for a certain purpose.  It            
 was a statutory requirement that the revenue collected be used for            
 harbors.  A provision would be included in the contract that the              
 state of Alaska would no longer be responsible for the cost                   
 associated with the replacement of a facility.  The municipality              
 would then be responsible for the replacement cost.  Therefore, if            
 it used that money for something else, it could not rely on the               
 state for money.                                                              
                                                                               
 Number 0110                                                                   
                                                                               
 REPRESENTATIVE GREEN replied he did no see that written anywhere in           
 the bill.  If that was the intent of the amendment, he agreed with            
 it.                                                                           
                                                                               
 Number 0116                                                                   
                                                                               
 MR. KITO III said it would be taken care of in the contract                   
 language between the state and the municipality.  The department              
 did not think it would be necessary to include it in the statute.             
                                                                               
 REPRESENTATIVE GREEN said he did not want to leave it to chance.              
                                                                               
 Number 0130                                                                   
                                                                               
 CHAIR JAMES stated the controversial bill that Representative Carl            
 Moses introduced to raise the marine fuel tax was vetoed by the               
 Governor last year.  It was vetoed because it was only a small fix            
 to the overall problem.  She believed it was happening again this             
 session.  A piece-meal fix was not the solution to this problem.              
 The state continued to make excuses.  It needed to prioritize its             
 assets before expanding or buying new services.                               
                                                                               
 Number 0200                                                                   
                                                                               
 CHAIR JAMES said she wanted to hear from the municipalities and the           
 industry before taking any action on this bill.                               
                                                                               
 Number 0211                                                                   
                                                                               
 REPRESENTATIVE PORTER said he agreed with Chair James, but it was             
 very late in the session.  The bill had several committees of                 
 referral.  Therefore, there was ample time to alert the                       
 municipalities and the industry through the rest of the legislative           
 process.                                                                      
                                                                               
 Number 0239                                                                   
                                                                               
 CHAIR JAMES agreed it was late in the session.  However, if the               
 issue was important enough, it could be waived from a committee,              
 for example.                                                                  
                                                                               
 CHAIR JAMES called on Catherine Reardon, Department of Commerce and           
 Economic Development, to the table.  She asked her what the                   
 attitude was regarding the cost of the business license.  She                 
 further wanted to know what type of information was being sent to             
 individuals that applied for a business license that explained                
 their responsibilities as a license holder.                                   
                                                                               
 Number 0271                                                                   
                                                                               
 CATHERINE REARDON, Director, Central Office, Division of                      
 Occupational Licensing, Department of Commerce and Economic                   
 Development, explained the business license fee generated revenue             
 above and beyond the cost of administering the program.  She called           
 it a revenue generator for the state.  The increase was not                   
 intended to offset increased cost, but to increase revenue.  She              
 cited the revenue for FY 95 was $1,873,000 while the cost for                 
 administering the program was $346,000.  Therefore, the net gain to           
 the general fund was $1,527,000.  The state did provide services to           
 businesses through other divisions that were funded from the                  
 general fund.  She cited tourism as an example.  Moreover, the                
 division included a newsletter this time when it sent the business            
 license renewal form.  It was an opportunity to share information.            
                                                                               
 Number 0446                                                                   
                                                                               
 CHAIR JAMES said she was concerned about the penalty for not having           
 an additional business license for certain types of activities.               
                                                                               
 Number 500                                                                    
                                                                               
 MS. REARDON replied that information was mentioned on the business            
 license application form now.                                                 
                                                                               
 CHAIR JAMES said that information was especially needed for new               
 applicants.                                                                   
                                                                               
 Number 0513                                                                   
                                                                               
 REPRESENTATIVE ROBINSON said she liked the idea of moving from a              
 one year to a two year process.                                               
                                                                               
 Number 0523                                                                   
                                                                               
 MS. REARDON explained the division moved to a two year license                
 process several years ago.  Currently, the cost was $50 every two             
 years of which one-half of the renewals were processed each year.             
                                                                               
 Number 0539                                                                   
                                                                               
 REPRESENTATIVE ROBINSON wondered why a business license was needed            
 every two years.  She asked, why not five years, for example?                 
                                                                               
 Number 0548                                                                   
                                                                               
 MS. REARDON said that was a choice the legislature would have to              
 make because it was a revenue generating program.  The cost would             
 be higher for a five year program to cover the longer time span.              
 The fewer times the department had to process the paperwork, the              
 less the administrative cost, however.                                        
                                                                               
 Number 0587                                                                   
                                                                               
 CHAIR JAMES said many companies did not stay in business for five             
 years.  She envisioned the businesses would want a refund causing             
 more problems for the division.                                               
                                                                               
 CHAIR JAMES called on the first witness via teleconference in Mat-            
 Su, Rick Brown.                                                               
                                                                               
 Number 0626                                                                   
                                                                               
 RICK BROWN, Platting Officer, Matanuska-Susitna Borough, said he              
 was concerned about the ability of the DEC to continue to provide             
 the services that seemed to get short funded every year.  The                 
 Wasilla field office did a good job given the staff numbers.  If it           
 would not continue to be funded, it needed the ability to offset              
 that loss through fees.  He said he liked the wording in Sec. 8,              
 provision (a), and as it pertained to provision (9), "subdivision             
 plans for sewage waste disposal or treatment submitted under AS               
 46.03.090."  He reiterated something needed to be done to help the            
 department and the Wasilla field office.                                      
                                                                               
 Number 0721                                                                   
                                                                               
 CHAIR JAMES asked Ms. Adair what were the expected charges for                
 reviewing a subdivision?                                                      
                                                                               
 Number 0733                                                                   
                                                                               
 MS. ADAIR replied the fiscal note was based on $250 per                       
 subdivision.  She said AS 37.10.050 required an agency to set a fee           
 at a level that covered the cost, unless otherwise authorized by              
 the legislature.  Currently, the municipality fee was $350.                   
                                                                               
 Number 0774                                                                   
                                                                               
 CHAIR JAMES asked for a motion to adopt the amendments.                       
                                                                               
 Number 0781                                                                   
                                                                               
 REPRESENTATIVE PORTER moved to adopt Amendment 1 as Section 11.               
 Hearing no objection, it was so adopted.                                      
                                                                               
 Number 0825                                                                   
                                                                               
 REPRESENTATIVE GREEN moved to adopt Amendment 2 with changes.  He             
 moved to change the word "the" to "all" on page 1, line 3, Sec.               
 35.10.121.  He wanted the fee to be used accordingly.  The change             
 was supported by the department.  It still gave it flexibility.               
 Hearing no objection, it was so adopted.                                      
                                                                               
 Number 0922                                                                   
                                                                               
 REPRESENTATIVE PORTER moved to insert the language, "and political            
 subdivisions of the state" after the language "except the State of            
 Alaska," on page 2, line 25.  Hearing no objection, it was so                 
 inserted.  (Amendment 3)                                                      
                                                                               
 Number 0992                                                                   
                                                                               
 REPRESENTATIVE ROBINSON said she did not object to the amendment              
 proposed by Representative Porter, but wanted to hear further from            
 the state.  She said not all municipalities were self-insured.                
 Therefore, the ones that were self-insured were already paying.               
 The bill would put everyone on an equal foot.                                 
                                                                               
 Number 1045                                                                   
                                                                               
 REPRESENTATIVE PORTER replied self-insured municipalities were                
 paying their own fees and claims.  They were not avoiding a                   
 payment.  The state, however, was not taking a portion of it.                 
                                                                               
 Number 1072                                                                   
                                                                               
 CHAIR JAMES said transferring money did not solve the overall                 
 problem for the state.                                                        
                                                                               
 Number 1155                                                                   
                                                                               
 REPRESENTATIVE OGAN asked Chair James if she was going to take any            
 action on this bill today?                                                    
                                                                               
 Number 1166                                                                   
                                                                               
 CHAIR JAMES replied she was willing to move it out of the committee           
 today.  She did not know if she would vote in favor of the bill.              
 She was willing to move it forward in the legislative process,                
 however.                                                                      
                                                                               
 Number 1176                                                                   
                                                                               
 REPRESENTATIVE OGAN said this was a policy issue as well.                     
 Furthermore, he believed there was a fourth power of government,              
 the taxing authority of the agencies, and the bill further provided           
 that power.  The bureaucrats argued it was more efficient.  He                
 reiterated the bill further delegated the authority to let the                
 bureaucrats tax.  He felt it was inappropriate.                               
                                                                               
 Number 1244                                                                   
                                                                               
 CHAIR JAMES said she agreed with most of what Representative Ogan             
 said.  She was willing to move the bill forward, however.                     
                                                                               
 Number 1253                                                                   
                                                                               
 REPRESENTATIVE PORTER moved that CSHB 416(STA) am move from the               
 committee with individual recommendations and attached fiscal                 
 notes.  Representative Ogan objected.  A roll call vote was taken.            
 Representatives James, Green, Ivan, and Porter voted in favor of              
 the motion.  Representative Ogan voted against the motion.  The               
 bill moved from the House State Affairs Committee.                            
                                                                               
 HB 482 - STATE PROCUREMENT PRACTICES & PROCEDURES                           
                                                                               
 The next order of business to come before the House State Affairs             
 Committee was CSHB 482(L&C).                                                  
                                                                               
 CHAIR JAMES called on Dugan Petty, Department of Administration, to           
 present the bill.                                                             
                                                                               
 Number 1370                                                                   
                                                                               
 DUGAN PETTY, Director, Central Office, Division of General                    
 Services, Department of Administration, explained at the end of the           
 last session a federal law was passed, the Procurement Acquisition            
 Streamlining Act of 1994.  The Act incorporated a number of reforms           
 that the federal government was making to streamline its                      
 procurement practices.  The same was asked of the state.  The                 
 business climate was changing and the procurement area needed to be           
 changed as well.  He said reform was "on the horizon."  In Alaska,            
 the state recognized it did not have the resources to continue                
 doing business as in the past.  Therefore, Commissioner Mark Boyer,           
 Department of Administration asked that the state improve its                 
 procurement practices.  A Procurement Advisory Council was formed.            
 The council consisted of private practitioners, vendors, university           
 members, stake holders and state practitioners.  The council was an           
 on-going initiative.  The council would continue to look at the               
 regulations, policies and practices.  It also wanted to look at the           
 procedures and practices on a situational basis to see if they                
 could be re-engineered to work better.  House Bill 482, therefore,            
 was a result of the work of the council.  He proceeded to explain             
 the various sections of the bill.                                             
                                                                               
 Number 1591                                                                   
                                                                               
 MR. PETTY explained Sections 3 and 37 allowed the Commissioner of             
 Administration to remove a vender that had been disbarred or                  
 suspended from the current list of bidders.                                   
                                                                               
 MR. PETTY moving forward, explained Sections 4 and 22 allowed for             
 a more simplified acquisition process for small leases.  Small                
 leases were identified as those that were 3,000 square feet (s.f.)            
 or less.                                                                      
                                                                               
 Number 1639                                                                   
                                                                               
 MR. PETTY moving forward, explained Section 5 allowed for an                  
 extension of leases for up to 10 years provided that lease had at             
 least 6 months remaining.  It would also allow for a rent                     
 concession of at least 15 percent, or 10 percent with Americans               
 with Disabilities Act (ADA) compliances.                                      
                                                                               
 Number 1664                                                                   
                                                                               
 MR. PETTY moving forward, explained Sections 6 and 7 provided the             
 state with the ability to perform a lease-purchase acquisition of             
 real property without notifying the legislature in the event the              
 total amount of the payment was $500,000 or less, or the total                
 amount was under $2,500,000.                                                  
                                                                               
 Number 1698                                                                   
                                                                               
 MR. PETTY moving forward, explained Sections 8 and 12 allowed for             
 the identification of the subcontractors within 5 days of the award           
 for non-construction procurement.                                             
                                                                               
 Number 1749                                                                   
                                                                               
 REPRESENTATIVE OGAN said based on personal experience as a                    
 contractor, general contractors "bid shop" amongst the                        
 subcontractors if they were not required to report within a short             
 time frame.  He questioned if this was a good practice.  He said it           
 opened the possibility for unscrupulous business practices amongst            
 contractors.                                                                  
                                                                               
 Number 1806                                                                   
                                                                               
 CHAIR JAMES asked Mr. Petty to explain if that provision addressed            
 the concerns of Representative Ogan.                                          
                                                                               
 Number 1810                                                                   
                                                                               
 MR. PETTY replied the section was not intended to change that                 
 provision as it related to construction contracts.  The provision             
 of the five day report requirement remained as such.  The practice            
 was not problematic for the service and supply industry.  The                 
 council was concerned about the definition of a "supplier" and                
 "subcontractor."  Upon examination, there was not a bid shop                  
 problem amongst the service and supply industry, but it was a                 
 problem for the construction industry.                                        
                                                                               
 REPRESENTATIVE OGAN said, "thank you.  That clarified it."                    
                                                                               
 Number 1891                                                                   
                                                                               
 MR. PETTY moving forward, explained Section 9 allowed for a                   
 procurement officer to shorten the circulation period in a bid or             
 proposal.  Currently, only the chief procurement officer or the               
 Commissioner of Transportation and Public Facilities for                      
 construction bids, could reduce the period.                                   
                                                                               
 Number 1953                                                                   
                                                                               
 MR. PETTY moving forward, explained Section 10 required the bidder,           
 if it was to maintain the Alaska bidders' preference, to maintain             
 its place of business for at least six months.  The section was to            
 prevent the state from paying the difference upon review of a lower           
 bidder and not receiving a value in return.  The council determined           
 that was not the intent of the bidders' preference and suggested              
 the change.                                                                   
                                                                               
 Number 2066                                                                   
                                                                               
 REPRESENTATIVE OGAN asked Mr. Petty to explain the six months                 
 provision in Section 10.  He wondered if one year had been                    
 considered because that was the determinate for state residency.              
                                                                               
 Number 2091                                                                   
                                                                               
 MR. PETTY said the companion bill to HB 482 in the Senate addressed           
 this issue.  He said it would take up to 12 months for a business             
 to take advantage of the Alaska bidders' preference.  Therefore,              
 six months was reasonable.  It was also written as six months in              
 statute.                                                                      
                                                                               
 Number 2165                                                                   
                                                                               
 MR. PETTY moving forward, explained Section 11 empowered the                  
 procurement officer to determine to use a request for proposal                
 (RFP) in lieu of an invitation to bid (ITB) as opposed to the chief           
 procurement officer.  The council believed the more frequent use of           
 an RFP provided better value.                                                 
                                                                               
 Number 2203                                                                   
                                                                               
 MR. PETTY moving forward, explained Section 13 was a housekeeping             
 measure.  The current law required that the contents of a proposal            
 were not disclosed during the negotiations.  Section 13 changed it            
 so that they were not disclosed prior to the notice of intent to              
 award period.                                                                 
                                                                               
 Number 2265                                                                   
                                                                               
 MR. PETTY moving forward, explained Section 14 was also a                     
 housekeeping measure.  He explained when an RFP was cancelled the             
 proposals could be accessed under the Freedom of Information Act,             
 thereby, exposing competitor proposals to one another.  The section           
 would require the state to maintain a list of proposals if an RFP             
 was cancelled, and to return them back to the bidder.                         
                                                                               
 Number 2317                                                                   
                                                                               
 MR. PETTY moving forward, explained Section 15 allowed the                    
 contracting officer to state the amount on whatever page was                  
 appropriate in the contract instead of the current mandate                    
 requiring the amount on the first page.                                       
                                                                               
 Number 2350                                                                   
                                                                               
 MR. PETTY moving forward, explained Section 16 was a significant              
 change in statute.  A single-source contract could be entered into            
 when the chief procurement officer, or for construction, the                  
 Commissioner of the Department of Transportation and Public                   
 Facilities, determined in writing that an award through a bid of              
 RFP was not practical.  The officer could award it to a single-               
 source if it was in the interest of the state.                                
                                                                               
 Number 2434                                                                   
                                                                               
 CHAIR JAMES said she had a problem with Section 16.  She referred             
 the committee members to page 9, line 1, and read, "competitive               
 sealed bidding, competitive sealed proposals, or other competition            
 in accordance with regulations adopted by the commissioner."  She             
 felt the language was too broad and loose.                                    
                                                                               
 TAPE 96-50, SIDE A                                                            
 Number 0000                                                                   
                                                                               
 CHAIR JAMES announced the companion bill in the Senate added a                
 subsection (e) to Section 16.  She read, "except for procurement of           
 supply services or professional services or construction that do              
 not exceed the amount for small procurement under AS 36.30.320(a)             
 that's applicable.  The authority to make the determination                   
 required by this section may not be delegated even if the authority           
 to contract is delegated under AS 36.30.015(a)."  She explained it            
 was a decision that would have to be made by the commissioner.  The           
 addition was an attempt to tighten the language.  She was not                 
 comfortable with a single-source purchase because it distressed the           
 public.  She announced she would like to delete Section 16                    
 altogether.                                                                   
                                                                               
 Number 0192                                                                   
                                                                               
 MR. PETTY replied the companion bill in the Senate was amended to             
 consider the concerns regarding the delegation, accountability and            
 control to remain with the chief procurement officer, or the                  
 Commissioner of the Department of Transportation and Public                   
 Facilities.  The added section to the Senate bill that Chair James            
 read resolved those concerns.  This area took a tremendous amount             
 of time from the state and many of the requirements were an                   
 overkill.  Therefore, the council wanted the chief procurement                
 officer to make a reasonable determination to prevent an overkill             
 effort.                                                                       
                                                                               
 Number 0357                                                                   
                                                                               
 MR. PETTY moving forward, explained Section 17 would allow for                
 limited competition procurement without putting out an invitation             
 to bid or an RFP.  That determination would be made by the chief              
 procurement officer, or the Attorney General for legal service                
 contracts.                                                                    
                                                                               
 Number 0439                                                                   
                                                                               
 MR. PETTY moving forward, explained Section 19 permitted the use of           
 an innovative procurement as a method of source selection for new,            
 unique requirements, new technology, or to achieve the best value             
 after the chief procurement officer or the Commissioner of the                
 Department of Transportation and Public Facilitates, determined the           
 method was advantageous to the state and the Department of Law                
 approved the procurement plan.  He cited the Exxon Valdez Oil Spill           
 Trustee Council typically wanted to use the RFP bid process by                
 notifying the public.  The RFP rules did not require that in                  
 statute.  Therefore, the council was asking for the ability to use            
 an innovative methodology subject to the public notice                        
 requirements.                                                                 
                                                                               
 Number 0593                                                                   
                                                                               
 MR. PETTY moving forward, explained Section 21 expanded the                   
 requirement to independently examine the material facts to any                
 state official when making a determination for an alternate                   
 procurement.  The section gave the accountability to the person in            
 authority.  If a person knowing made a false statement, he or she             
 would be guilty of a class A misdemeanor.                                     
                                                                               
 Number 0648                                                                   
                                                                               
 MR. PETTY moving forward, explained Section 22 expanded the minimum           
 threshold for a formal invitation to bid to $50,000 for services              
 and supplies, to $100,000 for construction, and to 3,000 s.f. for             
 leases.                                                                       
                                                                               
 Number 0702                                                                   
                                                                               
 MR. PETTY moving forward, explained Section 27 required that                  
 records of innovative procurement be kept and be made available by            
 the Department of Administration.                                             
                                                                               
 Number 0723                                                                   
                                                                               
 MR. PETTY moving forward, explained Section 28 applied the two                
 tiered protest process to all procurement except small ones.  The             
 Commissioner of the Department of Administration was permitted to             
 establish a simplified procedure for protests of small procurement.           
                                                                               
 Number 0774                                                                   
                                                                               
 MR. PETTY moving forward, explained Section 29 allowed for the                
 protest of a solicitation to be filed 10 days before a bid or RFP             
 opening, unless the bid or RFP provided for a shorter period.                 
 There was concern in the House Labor and Commerce Committee and the           
 Senate that this could abridge a bidder from his right to protest.            
 That was not the intent, however.  If a pre-bid or pre-proposal               
 conference was held within 12 days of a bid opening, a protest                
 could only be filed only prior to the bid opening to prevent new              
 information being presented without the ability to protest.                   
                                                                               
 Number 0875                                                                   
                                                                               
 MR. PETTY moving forward, explained Sections 30, 31, 33 and 34                
 affected the response to a protest days.  The sections set the days           
 at 10, 15 and 30.  The sections clarified the current statutes.               
                                                                               
 Number 0897                                                                   
                                                                               
 MR. PETTY moving forward, explained Section 32 limited a                      
 protestor's damage to reasonable bid or proposal preparation costs.           
                                                                               
 Number 0924                                                                   
                                                                               
 MR. PETTY moving forward, explained Sections 35 and 36 established            
 a statute of limitations to bring a claim against the state.  The             
 claim must be brought within 90 days after the contractor became              
 aware of the claim or knew the basis of the claim.  Lessors must              
 also bring a claim regarding Consumer Price Index (CPI) rent                  
 adjustments within the terms of the lease.  The restriction,                  
 however, did not limit a contractor's right under a disputed                  
 billing timely payment according to AS 36.05.285.                             
                                                                               
 Number 0962                                                                   
                                                                               
 MR. PETTY moving forward, explained Sections 38 and 39 added some             
 exemptions.  Section 38 exempted the operation and protection of              
 assets or disposal of assets through the Agricultural Loan Program            
 acquired by the Department of Natural Resources.                              
                                                                               
 Number 1009                                                                   
                                                                               
 CHAIR JAMES said she did not have a problem if the state did not              
 operate under the procurement code when operating a facility.  She            
 did have a problem, however, if the state wanted to sell a                    
 facility.  If the state wanted to sell a facility, it should                  
 operate under the principles of competitiveness.                              
                                                                               
 Number 1043                                                                   
                                                                               
 MR. PETTY replied as the bill read it would allow for the disposal            
 of equipment and supplies acquired by the Department of Natural               
 Resources to not be subject to the procurement code.                          
                                                                               
 Number 1058                                                                   
                                                                               
 CHAIR JAMES asked Mr. Petty if the disposal would be recognized as            
 an on-going expense of a business or a liquidation?  She believed             
 an on-going expense would not have to go through this process.  She           
 was not willing to exempt a liquidation, however.                             
                                                                               
 Number 1093                                                                   
                                                                               
 MR. PETTY replied a liquidation would not be subject to the                   
 procurement code.  The concern of Chair James was well founded .              
                                                                               
 Number 1109                                                                   
                                                                               
 CHAIR JAMES suggested adding additional language to indicate the              
 distinction between on-going business activity and liquidation.               
                                                                               
 Number 1149                                                                   
                                                                               
 MR. PETTY wondered if Chair James was concerned about the                     
 liquidation of certain assets by the state and their subject to the           
 procurement code.  He stated the section would support her                    
 concerns.                                                                     
                                                                               
 Number 1181                                                                   
                                                                               
 CHAIR JAMES said she would look at the provision further.  She said           
 it was hard to distinguish between a liquidation and an on-going              
 business asset.  She did not want to extend that provision, or it             
 would defeat the leniency given.                                              
                                                                               
 Number 1200                                                                   
                                                                               
 MR. PETTY said he understood the concerns of Chair James.  He said            
 the procurement code and the regulations for disposal were                    
 primarily aimed at personal property and acquisition of supplies              
 and services which did not fit the picture of the disposal of an              
 asset.  Furthermore, the bill addressing the railroad disposal, for           
 example, specifically made the disposal not subject to the                    
 procurement code.  The reason was due to broad considerations that            
 the procurement code had not focused on.  He would talk to the                
 Department of Natural Resources about this issue further.                     
                                                                               
 Number 1249                                                                   
                                                                               
 CHAIR JAMES said in the absence of following the procurement code,            
 specific language should be included to explain the process.                  
                                                                               
 MR. PETTY said the public deserved an accountable process.                    
                                                                               
 CHAIR JAMES said she would consider the provisions further.  She              
 asked Mr. Petty to continue explaining the sections.                          
                                                                               
 Number 1277                                                                   
                                                                               
 MR. PETTY moving forward, explained Section 39 exempted the                   
 livestock purchased by the Alaska Correctional Industries from the            
 procurement code.                                                             
                                                                               
 Number 1301                                                                   
                                                                               
 CHAIR JAMES said it did not work when conducting ordinary business.           
 It only worked in the case of protecting the public from the                  
 government purchase of goods and services.                                    
                                                                               
 MR. PETTY agreed with Chair James.                                            
                                                                               
 Number 1315                                                                   
                                                                               
 MR. PETTY moving forward, explained Section 40 allowed for General            
 Services Administration, Federal Supply Schedules (GSA) supply                
 schedules to open to state and local governments in accordance with           
 regulations established by the Commissioner of the Department of              
 Administration and as provided for in the federal law.  The                   
 schedules offered more favorable prices for the state.  The current           
 law provided for that, but the council wanted to clarify the intent           
 in statute.                                                                   
                                                                               
 Number 1358                                                                   
                                                                               
 CHAIR JAMES asked Mr. Petty the status of the companion bill in the           
 Senate (SB 275)?                                                              
                                                                               
 Number 1367                                                                   
                                                                               
 MR. PETTY replied it passed out of the Senate State Affairs                   
 Committee and was now in the Senate Judiciary Committee.                      
                                                                               
 Number 1387                                                                   
                                                                               
 REPRESENTATIVE ROBINSON announced she had to leave to attend a                
 caucus meeting.                                                               
                                                                               
 Number 1399                                                                   
                                                                               
 REPRESENTATIVE OGAN asked Mr. Petty, if the state was able to                 
 purchase through the GSA, would that eliminate instate businesses?            
                                                                               
 Number 1413                                                                   
                                                                               
 MR. PETTY said it was not clear that this would happen at the                 
 federal level.  There was a moratorium surrounding this provision             
 in the statute.  It was not clear if the moratorium would be                  
 lifted, however.  If it was lifted, the department would act as the           
 gatekeeper for the Division of General Services.  The intent was to           
 use the contracts within the state when a dealer could give GSA               
 prices.                                                                       
                                                                               
 Number 1469                                                                   
                                                                               
 REPRESENTATIVE GREEN asked Mr. Petty to further explain Sections 4            
 and 22, and Sections 6 and 7.  He asked what was the current cost             
 for rental space?                                                             
                                                                               
 Number 1499                                                                   
                                                                               
 MR. PETTY replied it was approximately $1.35 to $1.50 per s.f.                
 There were rents as high as $5 to $6 per s.f. in Barrow, for                  
 example.  At the other end there were rents as low as 70 cents to             
 80 cents per square foot.                                                     
                                                                               
 Number 1525                                                                   
                                                                               
 REPRESENTATIVE GREEN asked Mr. Petty how the 3,000 s.f. or the                
 $500,000 was arrived at in Section 4 and Section 6?                           
                                                                               
 Number 1542                                                                   
                                                                               
 MR. PETTY replied the $500,000 was the current threshold                      
 requirement in AS 36.30.80 to bring an operating lease to the                 
 legislature for approval.  The 3,000 s.f. made more sense than a              
 dollar amount because of fluctuations.  The council recommended               
 5,000 s.f. initially.  It was reduced to 3,000 s.f. in the House              
 Labor and Commerce Committee.                                                 
                                                                               
 Number 1589                                                                   
                                                                               
 REPRESENTATIVE GREEN said he was concerned that those two                     
 provisions together would give latitude for the state to enter into           
 a "healthy" contract.                                                         
                                                                               
 Number 1602                                                                   
                                                                               
 CHAIR JAMES said she was not interested in the state entering into            
 any lease-purchase agreement without legislative approval no matter           
 how small.  It was necessary to consider the obligation of the                
 state in the future regarding maintenance, for example.                       
                                                                               
 Number 1634                                                                   
                                                                               
 MR. PETTY replied any decision made on a lease-purchase agreement             
 needed to consider the cost of operation and maintenance of the               
 facility.  It was built into the formula.  If it did not make sense           
 to own a building considering the operation cost, then the state              
 should be leasing it.                                                         
                                                                               
 Number 1663                                                                   
                                                                               
 CHAIR JAMES said she understood what Mr. Petty said.  However,                
 deferred maintenance had not been funded.  Therefore, it behooved             
 the legislature to consider the obligation by approving this                  
 provision.  She reiterated that the legislature did not have a                
 future plan to deal with the deferred maintenance of public                   
 facilities.  She suggested as a solution that the state sell and              
 lease back all of the public facilities.                                      
                                                                               
 Number 1707                                                                   
                                                                               
 REPRESENTATIVE GREEN asked Mr. Petty to explain Section 9 further.            
 He said it opened the avenue for the "good ole boy."  He was                  
 concerned that the length of time could be shortened to favor                 
 someone.                                                                      
                                                                               
 Number 1734                                                                   
                                                                               
 MR. PETTY replied that clearly was not the intend of Section 9.               
 The current requirement was 21 days no matter what, unless the                
 chief procurement office determined it needed to be changed.  He              
 said 10 days were the typical length of time needed, leaving 11               
 days left for the process.  The language "advantageous to the state           
 and adequate competition" was added to insure competition within              
 the amount of time necessary.                                                 
                                                                               
 Number 1791                                                                   
                                                                               
 CHAIR JAMES called for a five minute break.                                   
                                                                               
 Number 1801                                                                   
                                                                               
 CHAIR JAMES called the House State Affairs Committee meeting back             
 to order.  Representatives Ogan, Porter, Green and James were                 
 present.                                                                      
                                                                               
 CHAIR JAMES called on the first witness via teleconference in                 
 Anchorage, Dave Gerke.                                                        
                                                                               
 Number 1829                                                                   
                                                                               
 The record reflected the testimony of Dave Gerke was inaudible at             
 times due to interference.                                                    
                                                                               
 DAVE GERKE said he had been an Alaskan resident for over 20 years.            
 He was disabled.  He expressed his opposition to HB 482 because it            
 would not be good for Alaska.  He specifically opposed Section 10             
 addressing Alaska bidders' preference.  He stated it would hinder             
 a lot of people with disabilities and was discriminatory against              
 those trying to get into procurement with the state.  He further              
 opposed Section 16 addressing a single-source contract.  He                   
 reiterated the bill was bad for Alaskan companies except for a few            
 bureaucrats in Juneau.  He suggested the committee members take a             
 look at the provisions further before taking any action.                      
                                                                               
 Number 2061                                                                   
                                                                               
 CHAIR JAMES explained to Mr. Gerke the six months requirement was             
 added to prevent the establishment of a company to obtain the bid.            
 That was unfair to established businesses.                                    
                                                                               
 Number 2115                                                                   
                                                                               
 MR. GERKE replied Section 10 would not affect his business that               
 much.  He was concerned about future disabled companies, however.             
                                                                               
 Number 2135                                                                   
                                                                               
 CHAIR JAMES thanked Mr. Gerke for his testimony.  She called on               
 further discussion from the committee members.                                
                                                                               
 CHAIR JAMES announced she did not plan to move the bill out of the            
 committee today.                                                              
                                                                               
 Number 2144                                                                   
                                                                               
 REPRESENTATIVE OGAN said he was distressed last year to pass bills            
 that exempted various quasi private organizations from the                    
 procurement process.  He had stated many times that there was a               
 problem with the procurement process.  Therefore, he applauded the            
 efforts of Mr. Petty and the council.  The bill needed further                
 work, but he agreed with the concept of it.                                   
                                                                               
 Number 2197                                                                   
                                                                               
 CHAIR JAMES thanked Mr. Petty for his time and explanation of the             
 bill today.                                                                   
                                                                               
 HB 136 - MANDATE SALE OF ALASKA RAILROAD                                    
                                                                               
 The next order of business to come before the House State Affairs             
 Committee was HB 136.                                                         
                                                                               
 CHAIR JAMES announced she wanted to waive the bill forward to the             
 next committee of referral - the House Finance Committee.                     
                                                                               
 CHAIR JAMES explained there was an identical bill moving forward in           
 the Senate.  The Senate bill would probably be the bill that House            
 of Representatives would consider.                                            
                                                                               
 CHAIR JAMES asked if there was an objection to waive the bill from            
 the committee.  Hearing no objection, it was so waived from the               
 House State Affairs Committee.                                                
                                                                               
 HB 198 - PFD ALLOWABLE ABSENCES                                             
                                                                               
 The next order of business to come before the House State Affairs             
 Committee was CSHB 198(STA) (9-LS0745/C).                                     
                                                                               
 CHAIR JAMES called on Representative Kim Elton, to present the                
 committee substitute.                                                         
                                                                               
 Number 2349                                                                   
                                                                               
 REPRESENTATIVE KIM ELTON explained the changes to the committee               
 substitute.  He referred the committee members to page 2, line 20,            
 and explained item (J) was added.  The item was added to allow an             
 absence for the care of a parent, spouse, sibling, child, or                  
 stepchild with a critical life-threatening illness whose treatment            
 required travel outside of the state.  The language was also                  
 included in the title to avoid the "christmas tree" effect.  He               
 thanked the staff members and the committee members for their time            
 spent on the bill.                                                            
                                                                               
 CHAIR JAMES announced she was ready to move the bill forward.                 
                                                                               
 Number 2408                                                                   
                                                                               
 REPRESENTATIVE PORTER explained the committee substitute precluded            
 a resident from taking care of a relative who resided outside of              
 Alaska.                                                                       
                                                                               
 Number 2424                                                                   
                                                                               
 REPRESENTATIVE PORTER moved that CSHB 198(STA) move from the                  
 committee with individual recommendations and attached fiscal                 
 notes.  Representative Ogan objected for further testimony from the           
 public and to offer an amendment.                                             
                                                                               
 CHAIR JAMES called on the first witness via teleconference in Mat-            
 Su, Ross Perrine.                                                             
                                                                               
 Number 2439                                                                   
                                                                               
 ROSS PERRINE said he was a merchant seaman and had lived in Alaska            
 for the past 10 years.  He had been consistently denied the                   
 permanent fund dividend (PFD).  He felt his work as a merchant                
 seaman should be considered an allowable absence.  It was not a               
 question of residency.                                                        
                                                                               
 TAPE 96-50, SIDE B                                                            
 Number 0000                                                                   
                                                                               
 MR. PERRINE further said his work was vital to Alaska as a direct             
 participant in the moving of Alaskan Northslope Oil.  He reiterated           
 he felt he was being excluded from the PFD program because of his             
 occupation.  He said it was not intentional on the part of the                
 program, but an accidental result when defining the allowable                 
 absences.  The majority of Alaskans he had talked to also felt his            
 situation was unfair.                                                         
                                                                               
 Number 0033                                                                   
                                                                               
 CHAIR JAMES asked Mr. Perrine how long at a time was he gone?                 
                                                                               
 Number 0037                                                                   
                                                                               
 MR. PERRINE replied anywhere from two to three months.  He also               
 received six weeks of leave when he was at home before returning to           
 the sea.                                                                      
                                                                               
 CHAIR JAMES called on Nanci Jones, Department of Revenue, to                  
 address the concerns of Mr. Perrine.                                          
                                                                               
 Number 0062                                                                   
                                                                               
 NANCI JONES, Director, Central Office, Permanent Fund Dividend                
 Division, Department of Revenue, stated there were many inequities            
 in the allowable absences for the PFD.  She said, "I am asking the            
 legislature to deal with the inequities regarding the absences."              
 The program did not recognize the private industry.  The current              
 allowable absences were for congressional delegation, and state               
 employees, for example.  She reiterated there were no provisions              
 for the private industry.  She called it a discrimination and an              
 inequity against the other half of the Alaskan residents that had             
 careers that required them to be outside of the state.  She was               
 trying to bring more balance and equity between the allowable                 
 absences.  She asked the committee members to recall her previous             
 testimony warning them that when considering this issue there were            
 many areas to consider.                                                       
                                                                               
 Number 0121                                                                   
                                                                               
 REPRESENTATIVE GREEN said he knew of a constituent that was an                
 airline pilot that was out of the state for approximately 190 days.           
 There were inequities, but he did not know if the legislature                 
 should continue to make exceptions.  "Sooner or later, we say it              
 doesn't matter anymore.  If you want the Alaska Permanent Fund,               
 just come here and stay for a little while."                                  
                                                                               
 Number 0143                                                                   
                                                                               
 CHAIR JAMES explained she asked Representative Elton to keep the              
 title tight to prevent the christmas tree effect.  She believed the           
 serious considerations of a terminally ill family members needed to           
 be addressed.  Therefore, she was willing to consider the bill in             
 the House State Affairs Committee.  She agreed with the concerns of           
 Ms. Jones regarding the inequities for allowable absences.  She               
 said she would yield to the department for suggestions.  She                  
 suggested a bill next session to clean up the problems.  The                  
 current program did not designate the difference between long-time            
 Alaskans and those that have been here a short time.  The courts,             
 however, had ruled that it was not legal to consider the tenure of            
 a long-time Alaskan resident.  She suggested as a solution to take            
 away all the exceptions.  That would be fair, she said, rather than           
 including only a few exceptions for some.  She reiterated she                 
 empathized with Mr. Perrine's concerns.  She was not willing to               
 consider his profession as an exemption in the bill, however.                 
                                                                               
 Number 0255                                                                   
                                                                               
 REPRESENTATIVE OGAN moved to include "U.S. Merchant Marines" to               
 page 2, line 24, item (K), and to amend the title accordingly.                
 Representative Green objected.  Discussion followed.                          
                                                                               
 Number 0279                                                                   
                                                                               
 REPRESENTATIVE OGAN said he understood the concerns of the                    
 christmas tree effect.  He said it was late in the game to consider           
 this issue and would consider working on it further next session.             
 He said a disqualification based on a person's career was not fair.           
                                                                               
 Number 0305                                                                   
                                                                               
 CHAIR JAMES replied she agreed with Representative Ogan.  However,            
 she did not think this was the correct piece of legislation to                
 include that amendment.  The bill would never pass.                           
                                                                               
 Number 0315                                                                   
                                                                               
 REPRESENTATIVE GREEN said he could not pass the bill in good                  
 conscience without including "Airline Pilot" as an allowable                  
 absence.                                                                      
                                                                               
 Number 0319                                                                   
                                                                               
 CHAIR JAMES reiterated she wanted to maintain the integrity of the            
 bill and to only address the concerns of terminally ill family                
 members.                                                                      
                                                                               
 CHAIR JAMES called for a roll call vote.  Representatives James,              
 Green, Ivan and Porter voted against the motion.  Representative              
 Ogan voted in favor of the motion.  The amendment failed.                     
                                                                               
 CHAIR JAMES called on the next witness via teleconference in                  
 Glennallen, George Reichman.                                                  
                                                                               
 Number 0354                                                                   
                                                                               
 GEORGE REICHMAN said he had been a missionary worker in Alaska                
 since 1975.  As a result of his job he was required to leave Alaska           
 every four years to meet with individuals and churches that                   
 financially supported his work.  He wondered why it was not                   
 included as an allowable absence since it was a requirement of his            
 job.  His family could use the money because his children were                
 about ready to go to college.  He said it would be easy to document           
 his time away from Alaska and show the intent of his family to                
 return.  He felt he and his family were being excluded unfairly.              
                                                                               
 Number 0426                                                                   
                                                                               
 CHAIR JAMES thanked Mr. Reichman for his testimony.  She reiterated           
 a serious look at the allowable absences was needed.                          
                                                                               
 CHAIR JAMES called on a motion to move the bill from the committee.           
                                                                               
 Number 0443                                                                   
                                                                               
 REPRESENTATIVE OGAN moved that CSHB 198(STA) (9-LS0745/F) be                  
 adopted for consideration.  Hearing no objection, it was so                   
 adopted.                                                                      
                                                                               
 Number 0462                                                                   
                                                                               
 REPRESENTATIVE GREEN moved that the word "or" be deleted from page            
 2, line 14.  Hearing no objection, it was so deleted.  (Amendment             
 1)                                                                            
                                                                               
 Number 0528                                                                   
                                                                               
 REPRESENTATIVE PORTER moved that CSHB 198(STA) am move from the               
 committee with individual recommendations and attached fiscal                 
 notes.  Hearing no objection, it was so moved from the House State            
 Affairs Committee.                                                            
                                                                               
 HB 546 - G.O. BONDS: SCHOOLS & UNIV.                                        
                                                                               
 The next order of business to come before the House State Affairs             
 Committee was HB 546.                                                         
                                                                               
 The record reflected the return of Representative Robinson at 10:45           
 a.m.                                                                          
                                                                               
 CHAIR JAMES announced she wanted to form a subcommittee to further            
 address HB 546.                                                               
                                                                               
 CHAIR JAMES called on the first witness via teleconference in                 
 Dillingham, Donald Evans.                                                     
                                                                               
 Number 0586                                                                   
                                                                               
 DONALD EVANS, Superintendent, Southwest Region School District,               
 read the following statement into the record.                                 
                                                                               
 "I would like to thank the committee for the opportunity to speak             
 in support of HB 546.                                                         
                                                                               
 "I believe that it is imperative that the Alaska State Legislature,           
 together with the Governor's administration, take responsible, and            
 timely action to address the overwhelming and growing need for                
 school facility maintenance and construction within our state.                
 That need, while it is not limited to, is no more evident nor is            
 the need greater, than in unorganized areas of the state served by            
 REAA school districts.                                                        
                                                                               
 "HB 546, proposes the use of G.O. Bonds to address those needs.  HB           
 546 represents a viable and practical method for the State and the            
 Alaska State Legislature to meet their responsibility.                        
                                                                               
 "For several years, the Southwest Region School District has been             
 in need of, and has requested the support of the state in                     
 replacement, or remodel of three facilities.  The District has                
 annually placed the Togiak School Replacement as its highest                  
 capital improvement priority.                                                 
                                                                               
 "The existing Togiak School serves 197 elementary and high school             
 students.  The original structure was constructed in 1958 by Bureau           
 of Indian Affairs and later transferred to the State of Alaska.  A            
 permanent addition to the structure was added in the 1970's.  Since           
 that time, several portable classrooms have been added.  In fact              
 more than 60% of the student population of the Togiak School are              
 served in portable classrooms.  For years now, the children and               
 parents of Togiak have trusted that this was only temporary, and              
 that the capital improvement process would correct the unhoused               
 student conditions.  The Southwest Region School District had                 
 applied and continues to apply through the Department of                      
 Education's CIP process.                                                      
                                                                               
 "The School District and the Community of Togiak have worked                  
 together to prepare for the funding, when it is made available.               
 The Togiak Natives Ltd. corporation along with the city of Togiak             
 has donated 40 acres of land for a new school site.  The Southwest            
 Region School District has completed initial site survey and                  
 educational specification work.                                               
                                                                               
 "For the 1995-96 school year, the Togiak School is ranked number 7            
 on the Department of Education CIP priority list.  The Departments            
 recognition of the need in Togiak sprank hope, but only until the             
 Governor's Budget called for funding of the number 1 construction             
 priority.                                                                     
                                                                               
 "Also for the 1995-96 school year, the Southwest Region School                
 District initiated a major maintenance request for the Koliganek              
 School.  As a result of continuing structural problems the District           
 sought and received engineering reports on the building.  Repeated            
 roof & wall separations, building shifts, and ground water flooding           
 experienced annually at the school was found to be from an improper           
 foundation, design and construction.  The engineering solution                
 calls for repairs and corrections that will cost approximately                
 $800,000.  Just this month, in the Koliganek School snow drifted 15           
 inches deep in one room, due to a wall separation that has occurred           
 just since summer.  I wonder how the State could not find the               
 $800,000 to save a $6,000,000 school before it is not able to be              
 saved.  This project is currently ranked number 20 on the major               
 maintenance list and is not scheduled for funding this year.                  
                                                                               
 "I am aware that the needs of the Southwest Region School District            
 are not unique throughout the State, but this merely makes the                
 current situation more critical.  To suffer under the belief and            
 practice that by taking care of a few needs at the top of an (at              
 best) arbitrary list, and carrying on with business as usual,                 
 constitutes burying the State head in the sand.  Inadequately                 
 addressing the capitol needs of schools in Alaska, is ignoring the            
 real and growing State responsibility to the children.  Not acting            
 on HB 546, and continually resting on the rhetoric that there isn't           
 the money, and therefore there are no solutions, is a cop out.                
                                                                               
 "HB 546 offers a solution and I believe that failure to pursue this           
 solution would be irresponsible management of the States existing             
 property, and an extreme injustice to the children of Alaska.                 
                                                                               
 "I ask that you support HB 546, and pass it out of committee today.           
                                                                               
 "Thank you for your time and the opportunity to speak."                       
                                                                               
 Number 0821                                                                   
                                                                               
 CHAIR JAMES thanked Mr. Evans for his testimony.  She announced the           
 bill would pass out of the House State Affairs Committee today.               
 She reiterated a subcommittee had been formed to draft additional             
 language.                                                                     
                                                                               
 Number 0837                                                                   
                                                                               
 REPRESENTATIVE OGAN suggested the committee look at the legal                 
 opinion of Tamara Cook, Legislative Legal and Research Services.              
 He explained the opinion indicated the bill was possibly                      
 unconstitutional.                                                             
                                                                               
 Number 0865                                                                   
                                                                               
 CHAIR JAMES said the opinion suggested contacting the Bond Council            
 to verify the constitutionality.  She contacted the council and it            
 indicated it was not a problem.                                               
                                                                               
 Number 0884                                                                   
                                                                               
 REPRESENTATIVE IVAN asked Chair James what her intention was for HB           
 546.                                                                          
                                                                               
 CHAIR JAMES explained the subcommittee would draft some changes to            
 accept the new division by senate districts.  The subcommittee                
 members consisted of Representatives Ivan, Robinson, Green, Ogan              
 and James.                                                                    
                                                                               
 Number 1060                                                                   
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 CHAIR JAMES adjourned the House State Affairs Committee meeting at            
 11:05 a.m.                                                                    
                                                                               

Document Name Date/Time Subjects