Legislature(1997 - 1998)
03/25/1997 08:07 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE March 25, 1997 8:07 a.m. MEMBERS PRESENT Representative Jeannette James, Chair Representative Ethan Berkowitz Representative Kim Elton Representative Mark Hodgins Representative Ivan Ivan Representative Al Vezey MEMBERS ABSENT Representative Fred Dyson COMMITTEE CALENDAR * HOUSE BILL NO. 200 "An Act relating to subpoenas of the Administrative Regulation Review Committee; and providing for an effective date." - HEARD AND HELD HOUSE BILL NO. 155 "An Act relating to hearings before and authorizing fees for the State Commission for Human Rights; and providing for an effective date." - MOVED CSHB 155(STA) OUT OF COMMITTEE HOUSE BILL NO. 78 "An Act relating to the definition of certain state receipts; and providing for an effective date." - HEARD AND HELD HOUSE BILL NO. 83 "An Act relating to commercial motor vehicle inspections; and providing for an effective date." - MOVED CSHB 83(STA) OUT OF COMMITTEE HOUSE BILL NO. 143 "An Act relating to the art in public places requirements for state-owned and state-leased buildings and facilities." - HEARD AND HELD * HOUSE BILL NO. 181 "An Act relating to separate segregated funds for certain political contributions from corporations and labor organizations." - HEARD AND HELD (* First public hearing) PREVIOUS ACTION BILL: HB 200 SHORT TITLE: SUBPOENA POWER: ADMIN. REG. REVIEW COMMIT SPONSOR(S): REPRESENTATIVE(S) JAMES JRN-DATE JRN-PG ACTION 03/18/97 737 (H) READ THE FIRST TIME - REFERRAL(S) 03/18/97 737 (H) STATE AFFAIRS 03/25/97 (H) STA AT 8:00 AM CAPITOL 102 BILL: HB 155 SHORT TITLE: HUMAN RIGHTS COMMISSION FEES & HEARINGS SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-PG ACTION 02/24/97 443 (H) READ THE FIRST TIME - REFERRAL(S) 02/24/97 443 (H) STATES AFFAIRS, HES, FINANCE 02/24/97 444 (H) ZERO FISCAL NOTE (GOV) 02/24/97 444 (H) GOVERNOR'S TRANSMITTAL LETTER 03/11/97 (H) STA AT 8:00 AM CAPITOL 102 03/11/97 (H) MINUTE(STA) 03/13/97 (H) STA AT 8:00 AM CAPITOL 102 03/13/97 (H) MINUTE(STA) 03/20/97 (H) STA AT 8:00 AM CAPITOL 102 03/10/97 (H) MINUTE(STA) 03/22/97 (H) STA AT 10:00 AM CAPITOL 102 BILL: HB 78 SHORT TITLE: AMEND DEFINITION OF "PROGRAM RECEIPTS" SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-PG ACTION 01/16/97 88 (H) READ THE FIRST TIME - REFERRAL(S) 01/16/97 88 (H) STA, L&C, FINANCE 01/16/97 88 (H) ZERO FISCAL NOTE (GOV\VARIOUS DEPTS) 01/16/97 88 (H) GOVERNOR'S TRANSMITTAL LETTER 03/11/97 (H) STA AT 8:00 AM CAPITOL 102 03/11/97 (H) MINUTE(STA) 03/13/97 (H) STA AT 8:00 AM CAPITOL 102 03/13/97 (H) MINUTE(STA) 03/20/97 (H) STA AT 8:00 AM CAPITOL 102 03/20/97 (H) MINUTE(STA) 03/22/97 (H) STA AT 10:00 AM CAPITOL 102 BILL: HB 83 SHORT TITLE: COMMERCIAL VEHICLE INSPECTIONS SPONSOR(S): REPRESENTATIVE(S) MARTIN JRN-DATE JRN-PG ACTION 01/22/97 122 (H) READ THE FIRST TIME - REFERRAL(S) 01/22/97 122 (H) TRANSPORTATION, STATE AFFAIRS 02/03/97 (H) TRA AT 1:00 PM CAPITOL 17 02/03/97 (H) MINUTE(TRA) 02/10/97 (H) MINUTE(TRA) 02/12/97 306 (H) TRA RPT CS(TRA) NT 3DP 2NR 02/12/97 307 (H) DP: SANDERS, KOOKESH, MASEK 02/12/97 307 (H) NR: ELTON, COWDERY 02/12/97 307 (H) ZERO FISCAL NOTE (DPS) 03/11/97 (H) STA AT 8:00 AM CAPITOL 102 03/11/97 (H) MINUTE(STA) 03/13/97 (H) STA AT 8:00 AM CAPITOL 102 03/13/97 (H) MINUTE(STA) 03/15/97 (H) STA AT 11:00 AM CAPITOL 102 03/15/97 (H) MINUTE(STA) 03/22/97 (H) STA AT 10:00 AM CAPITOL 102 BILL: HB 143 SHORT TITLE: REPEAL ART IN PUBLIC PLACES REQUIREMENT SPONSOR(S): REPRESENTATIVE(S) VEZEY, Hodgins JRN-DATE JRN-PG ACTION 02/17/97 374 (H) READ THE FIRST TIME - REFERRAL(S) 02/17/97 375 (H) STATE AFFAIRS 03/20/97 (H) STA AT 8:00 AM CAPITOL 102 03/20/97 (H) MINUTE(STA) 03/22/97 (H) STA AT 10:00 AM CAPITOL 102 03/25/97 841 (H) COSPONSOR(S): HODGINS BILL: HB 181 SHORT TITLE: SEPARATE SEGREGATED FUNDS: POLIT. CONTRIB SPONSOR(S): REPRESENTATIVE(S) VEZEY JRN-DATE JRN-PG ACTION 03/07/97 583 (H) READ THE FIRST TIME - REFERRAL(S) 03/07/97 584 (H) STATE AFFAIRS, JUDICIARY 03/25/97 (H) STA AT 8:00 AM CAPITOL 102 WITNESS REGISTER SARAH FELIX, Assistant Attorney General Governmental Affairs Section Civil Division Department of Law P.O. Box 110300 Juneau, Alaska 99811-0300 Telephone: (907) 465-3600 POSITION STATEMENT: Provided testimony in opposition to HB 200. PAULA HALEY, Executive Director Alaska State Commission for Human Rights 800 "A" Street, Suite 204 Anchorage, Alaska 99501-3669 Telephone: (907) 274-4692 POSITION STATEMENT: Provided testimony in support of HB 155. JAMES BALDWIN, Assistant Attorney General Governmental Affairs Section Civil Division Department of Law P.O. Box 110300 Juneau, Alaska 99811-0300 Telephone: (907) 465-3600 POSITION STATEMENT: Provided testimony on HB 78. MIKE GREANY, Legislative Fiscal Analyst Legislative Finance Division Legislative Agencies and Offices P.O. Box 113200 Juneau, Alaska 99811-3200 Telephone: (907) 465-3795 POSITION STATEMENT: Provided testimony on HB 78. MIKE FORD, Attorney Legislative Legal and Research Services Legislative Affairs Agency 130 Seward Street, Suite 409 Juneau, Alaska 99801-2105 Telephone: (907) 465-2450 POSITION STATEMENT: Provided testimony on HB 83. FRANK DILLON, Executive Director Alaska Trucking Association 3443 Minnesota Drive Anchorage, Alaska 99503 Telephone: (907) 276-1149 POSITION STATEMENT: Provided testimony in support of HB 83. CAROLYN ROSEBERY Address not provided Cordova, Alaska 66574 Telephone: (907) 424-7355 POSITION STATEMENT: Provided testimony on HB 143. BARBARA SHORT, Art Teacher Fairbanks North Star Borough School District 520 5th Avenue Fairbanks, Alaska 99701 Telephone: (907) 452-2000 ext. 417 POSITION STATEMENT: Provided testimony on HB 143. JUNE ROGERS P.O. Box 72786 Fairbanks, Alaska 99707 Telephone: (907) 456-6485 POSITION STATEMENT: Provided testimony on HB 143. BROOK MILES, Regulation of Lobbying Alaska Public Offices Commission Department of Administration P.O. Box 110222 Juneau, Alaska 99811-0222 Telephone: (907) 465-4864 POSITION STATEMENT: Provided testimony on HB 181. ACTION NARRATIVE TAPE 97-33, SIDE A Number 0001 The House State Affairs Standing Committee was called to order by Chair Jeannette James at 8:07 a.m. Members present at the call to order were Representatives James, Elton, Hodgins, Ivan and Vezey. Representative Berkowitz arrived at 8:08 a.m. HB 200 - SUBPOENA POWER: ADMIN. REG. REVIEW COMMIT The first order of business to come before the House State Affairs Standing Committee was HB 200, "An Act relating to subpoenas of the Administrative Regulation Review Committee; and providing for an effective date." CHAIR JEANNETTE JAMES, sponsor of HB 200, presented the bill. CHAIR JAMES asked that the committee members delete from the sponsor statement the sentence, "Every other similar Legislative Council Committee has the power to force witnesses to testify." It was not a correct statement; there were several other committees that did not have the power as well. CHAIR JAMES read the following sponsor statement into the record: "HB 200 gives the Committee the power to subpoena unwilling and/or uncooperative witnesses to Committee hearings. If the Committee intends to sort fact from fiction we need the tool of subpoena power. "We are not a democracy as is claimed, we are a regulatory bureaucracy! `We are from the government, and we are here to help you.' That statement brings chills to our constituents because the statement that follows will be one dealing with regulations. The Committee is charged with the task of regulatory oversight, the basic idea is to re-establish a democracy equally balanced between the Executive, Legislative and the Judicial branches of government. "There is no oversight of regulations by the Executive branch, former administrations have tried, but have been unsuccessful. It is up to us, the Legislative branch to be the overviewer of the regulations promulgated by the Statutes we make. "The Committee needs certain tools to operate, we have the statutory power to place witnesses under oath, the power to file perjury charges, the power to require cooperation from public officials, and the power to annul regulations through statute. "With the power of subpoena our tool kit will be complete. "If there are any questions please call me, or Walt Wilcox." Number 0239 REPRESENTATIVE KIM ELTON asked Chair James whether there had been any need so far to subpoena a person. Number 0256 CHAIR JAMES replied, "No." However, some had not responded to the requests. The committee had not been going for very long either. Number 0304 SARAH FELIX, Assistant Attorney General, Governmental Affairs Section, Civil Division, Department of Law, was the first person to testify in Juneau. The division was concerned mainly with the provision of AS 24.20.455 (c) on page 2 - the enforcement of subpoena by arrest. In the past, a similar procedure was used and challenged in the 1985 Schultz v. Sundberg court case. Representative Sundberg claimed a violation of civil rights by arrest and sued the state, as well as a number of individuals, under 42 U.S.C. Sec. 1983. One case went all the way to the Ninth Circuit Court of Appeals. Therefore, the division was concerned about the possibility of costly litigation. MS. FELIX further explained the division was concerned about the practical problems that could result in the enforcement upon the arrest. The division imagined that the Sergeant At Arms would need help with the arrest provision. The sergeant would also probably ask the troopers to enforce the arrest. The troopers would not have the immunity that the legislative staff would have relying on the qualified executive branch immunity. The troopers would also probably want a court order before arresting someone. The next agency involved would probably be Corrections, which would also probably want an order before locking someone up. MS. FELIX suggested deleting Section 24.20.455 (c) and inserting the following language: "hold public hearings, administer oaths, issue subpoenas, compel the attendance of witnesses and production of papers, books, accounts, documents, and testimony, and have the deposition of witnesses taken in a manner prescribed by court rule or law for taking dispositions in civil action;" MS. FELIX explained the Legislative Council and the Legislative Budget and Audit committees had the same provisions. Number 0575 REPRESENTATIVE MARK HODGINS asked Ms. Felix how the Office of the Attorney General or the courts did it when they had a subpoena. Was it similar to the provision she suggested adding? Number 0604 MS. FELIX replied that a subpoena was enforced by the court's contempt power. A person would be held in contempt, with the opportunity to explain to the court why he or she disobeyed the subpoena. The court ruled based on the excuse. Number 0632 REPRESENTATIVE HODGINS asked Ms. Felix what the difference was between AS 24.20.455 (c) and the provision that she suggested adding. Number 0644 MS. FELIX replied that AS 24.20.455 (c) provided for a summary arrest, while the other provision provided for an opportunity to be heard before the person was arrested and taken to prison. REPRESENTATIVE HODGINS asked Ms. Felix whether it would still have the same compelling power. MS. FELIX replied, "Yes." There were a number of agencies that issued an administrative subpoena. It was not to be taken lightly. Number 0702 REPRESENTATIVE HODGINS asked Ms. Felix what would be the consequences if someone disregarded the provision that she suggested adding. MS. FELIX replied that a consequence would be the penalties for contempt, such as jail time until the order was obeyed. REPRESENTATIVE HODGINS asked Ms. Felix whether the process would be at the discretion of the committee. MS. FELIX replied it would be at the discretion of the judge and the judicial system. REPRESENTATIVE HODGINS asked Ms. Felix what type of time sequence it would take from finding contempt to compelling the person to talk before the committee, for example. Number 0728 MS. FELIX replied that she did not know the time line. It would depend on the court and its case load. She would hope that the court would take the short session of the legislature into consideration. Number 0762 REPRESENTATIVE AL VEZEY asked Ms. Felix what the outcome of the Schultz v. Sundberg court case was. MS. FELIX replied that the state got off. The state was found to not be liable. The legislators received immunity, and the executive branch employees received qualified immunity. Number 0790 REPRESENTATIVE VEZEY asked Ms. Felix whether the legislature had the authority to issue a subpoena. Number 0797 MS. FELIX replied, "I think so." She reiterated that the division was not disputing the subpoena but rather the summary of arrest. Number 0863 REPRESENTATIVE ETHAN BERKOWITZ asked Ms. Felix whether the provision she suggested would keep the subpoena within the due process provisions. MS. FELIX replied, "Yes." The provision would not allow for summarily arresting a person without giving him or her a notice and an opportunity to be heard, shielding the legislature from the constitutional claims as in the Schultz v. Sundberg case. Number 0886 REPRESENTATIVE BERKOWITZ further stated, to answer the earlier question of Representative Hodgins, that when someone was arrested, he or she had to be brought before a judge or a magistrate within a very short period of time. Generally, that type of proceeding moved quickly. Number 0908 REPRESENTATIVE BERKOWITZ asked Ms. Felix whether she knew what the cost would be associated with the provision she suggested. Number 0915 MS. FELIX replied, "I do not." She suggested getting that type of information from the troopers, for example. Number 0941 CHAIR JAMES said she hoped there would not be any cost associated and that once given the subpoena power, it would probably not have to be used. As Chairman of the House State Affairs Standing Committee, she could move the case over to that committee, where she did have subpoena power. She believed, however, that the Administrative Regulation Review Joint Committee should have the same power. Number 0985 REPRESENTATIVE BERKOWITZ explained that he had issued thousands of subpoenas, and he had wished that the people had paid attention to them, but they generally did not. There were times when the weight of the law was necessary. Number 1003 CHAIR JAMES replied that when he gave a subpoena, it was under a different type of case law than in the legislature. The committee would not subpoena anybody outside of the government. If anybody in the government would refuse, then there would probably be more problems than just refusing the subpoena. Number 1029 REPRESENTATIVE BERKOWITZ replied that the subpoena power did not apply to federal employees. CHAIR JAMES said the committee completely worked within the framework of regulations written by the Administration. Therefore, the subpoena would be against those that had information or documents relating to regulations - the Administration. She did not think the Administration would deny a subpoena. Number 1084 REPRESENTATIVE ELTON stated that there was nothing that limited the subpoena power. He imagined that a person subject to regulations, for example, would need to be subpoenaed. REPRESENTATIVE ELTON asked Chair James whether the subpoena power that she had was similar to the subpoena power in AS 24.20.201 (a)(2). CHAIR JAMES replied that she did not know. It was the opinion of the leadership that the committee already had the subpoena power. Therefore, the committee chair did not just have the power; he or she needed higher authority as well. Number 1169 MS. FELIX replied that AS 24.25.010 referred to the chairman of a committee when authorized to do so by a majority of the membership of the committee and with the concurrence of the president or the speaker, or with the concurrence of the House or the Senate. The Legislative Council Committee had the same type of subpoena power as in AS 24.20.201 (a)(2). Number 1201 CHAIR JAMES stated that she did not have any objection to the suggestion made by Ms. Felix. However, she wanted to discuss it with the drafter. Number 1214 REPRESENTATIVE BERKOWITZ asked Ms. Felix whether she envisioned that judicial services would be serving the subpoenas. MS. FELIX said probably. The legislature would probably need some sort of assistance to serve the subpoenas. It needed to be looked at further, however. Number 1267 CHAIR JAMES announced she would take the suggestions of Ms. Felix to the drafter. The bill would be held over until Thursday, March 27, 1997. HB 155 - HUMAN RIGHTS COMMISSION FEES & HEARINGS The next order of business to come before the House State Affairs Standing Committee was HB 155, "An Act relating to hearings before and authorizing fees for the State Commission for Human Rights; and providing for an effective date." Number 1312 CHAIR JAMES explained there was a committee substitute (0-GH0045\E, Lauterbach, 3/22/97). It added the word "educational" to line 13, page 1. Number 1328 PAULA HALEY, Executive Director, Alaska State Commission for Human Rights, was the first person to testify via teleconference in Anchorage. She did not have a copy of the committee substitute in front of her. She was able to get letters to all of the committee members answering some of their questions. In the letters, she included the fact that the commission would not be opposed to reinserting the words "education" and "training" in front of the word "services," in AS 18.80.060(b)(4). She asked Chair James whether that was what the committee substituted proposed. Number 1358 CHAIR JAMES replied that the committee substitute only added the word "educational". She believed the word "educational" also included the meaning of training. MS. HALEY said she agreed. Number 1405 REPRESENTATIVE BERKOWITZ moved to adopt the proposed committee substitute (0-GH0045\E, Lauterbach, 3/22/97) as a working document. There was no objection; the committee substitute was so adopted. Number 1425 REPRESENTATIVE VEZEY moved that HB 155, as amended, move from the committee with individual recommendations and the attached zero fiscal note(s). There was no objection; CSHB 155(STA) moved from the House State Affairs Standing Committee. HB 78 - AMEND DEFINITION OF "PROGRAM RECEIPTS" The next order of business to come before the House State Affairs Standing Committee was HB 78, "An Act relating to the definition of certain state receipts; and providing for an effective date." Number 1550 JAMES BALDWIN, Assistant Attorney General, Governmental Affairs Section, Civil Division, Department of Law, was the first person to testify in Juneau. The purpose of the bill was to establish in the budget the program receipts as their own funding sources to provide an incentive for agencies to engage in revenue generating activities that would finance state governmental operations. The funding sources would not be considered a part of the unrestricted general fund. The idea was to emphasize that these activities would receive more favorable budget treatment. Mr. Baldwin cited an example whereby the Department of Law discovered that processing judgments was beneficial to the department. MR. BALDWIN further explained there were allegations that the bill could create a dedicated fund. However, the statutes addressed in the bill made it very clear that the money would not be dedicated. In other words, the power of the legislature was not restricted to appropriating the money to the purpose designated in law. That was why they were referred to as "designated program receipts". The statute generally indicated that the legislature "may" appropriate the money. It was not required by law; it was a statement of intent by the legislature which almost always was honored. Mr. Baldwin cited the Marine Highway Fund as an example. The bill, therefore, would have the effect of a separate funding source in the budget. It also recognized another type of funding source - corporate receipts. The bill also provided for the receipts of test marketing programs such as the fisheries. Number 1773 CHAIR JAMES stated her biggest concern was that these programs were, currently, kept separate. She was also concerned about the practice of companies paying a large amount of money to speed up the permitting process, as well as the Governor's concept of "open for business". In addition, she wondered who should pay the government to provide services - the big companies? TAPE 97-33, SIDE B Number 0001 CHAIR JAMES asked who would take care of the little guy who could not afford to speed up the permitting process. She wondered why the collection of the judgments was not already being done, because it was the job of the department. She asked: Why would it only consider doing the job if the money stayed in the department? She said this was an attitude about government that she did not want to go towards. Number 0034 MR. BALDWIN replied that the department was largely funded by the general fund; when there was a budget cut, it was the area that received the most scrutiny, requiring a shift of resources to areas of the greatest need. There were also areas that generated revenues but were not very glamorous. Therefore, by having that revenue source available, the department could devote resources away from the other general fund activities. MR. BALDWIN further stated that there was a statute that said the department could not charge the public for the provision of a normal government service unless authorized by law. Therefore, the control rested with the legislature. The bill would not change that either. The bill controlled the development of the program receipts as a funding source for activities that were sustaining and providing revenue for the state treasury. Program receipts should not be held to the same standards as other unrestricted general fund activities that were viewed differently by the legislature. Number 0165 CHAIR JAMES asked Mr. Baldwin whether it would be possible for the Department of Law to ask for authorization from the legislature for the collection of the judgments. Number 0186 MR. BALDWIN replied that the request would convert general fund money into contractual money. Number 0195 CHAIR JAMES replied that the program receipts were still general funds. Number 0207 MR. BALDWIN replied that general funds were what the legislature said they were. They were decided and defined by law. He said we did not want to create a designation of the money by law, taking away the power of the legislature. He cited the court case of Salmon v. Hickel that validated the approach. Number 0267 MIKE GREANY, Legislative Fiscal Analyst, Legislative Finance Division, Legislative Agencies and Offices, was the next person to testify in Juneau. Number 0277 CHAIR JAMES asked Mr. Greany why the bill was needed and what the benefits were. Number 0283 MR. GREANY replied that from a budgetary standpoint, it was a policy call that the legislature would have to make. It was a question of how budget sources should be characterized in the budget. When the Legislative Finance Division created a general appropriation bill, it contained three columns: general funds, other funds and total funds. House Bill 78 allowed for the funds from the program receipts now in the general funds to be moved into the "other funds" column. The funds would not be counted as state funds or as caps. MR. GREANY further stated that the framers of the constitution intended that all of the fees and taxes would be on the table for the legislature to appropriate as it saw fit. At statehood, there were approximately two dozen different funding sources. Now, there are 70, and each fund had a good reason for being created. The constitutional budget reserve issue was a wake-up call because it forced the sorting of the funds available. MR. GREANY said he was not arguing against the bill. He saw good reasons for it. It was a way of keeping certain program receipts out of the budgetary discussions. The Marine Highway Fund, for example, was swept at the end of each fiscal year to meet the Constitutional Budget Reserve (CBR) repayment provisions. There was also the provision to restore the funds back into the program. It was a good business practice as many private sector businesses practiced. Number 0746 CHAIR JAMES replied that this was not a private business; this was government. She asked Mr. Greany whether there were three columns in the budget currently. MR. GREANY replied that for appropriation purposes, there were only "general funds" and "other funds" that were broken down further. For example, there were the pure general fund, the general fund match, and the general fund program receipts that were broken down even further. The Administration about two years ago took the general fund program receipts and carved out the designated portion. Right now, the designated program receipts were still part of the general fund. The bill would take the designated general fund program receipts and point to other funds. Number 0852 CHAIR JAMES stated that the legislature was cutting the budget based on the general fund, with which she did not agree. She asked Mr. Greany how the bill would affect the bottom line of the budget. Number 0924 MR. GREANY replied that it would depend on how the legislature chose to view the budget. Some believed that every fund type should be scrutinized, even federal funds. The biggest scrutiny had been over the general funds. However, more were now looking at the total budget. Therefore, by identifying different funding sources, they could be tracked separately. Number 1031 REPRESENTATIVE ELTON stated that the letter from the Governor dated January 16, 1997, asserted that the bill would not sacrifice fiscal information or legislative prerogative. The testimony of Mr. Greany almost indicated that the bill would preclude legislative prerogative on how the program receipts could be spent. Number 1064 MR. GREANY replied that that was not his intent. It was a matter of how the funds would be tracked and where they would appear in the appropriation bill. Number 1089 REPRESENTATIVE ELTON asked Mr. Greany, whether the receipts from a test fishery would be identified as a program receipt, then appropriated through the appropriation process. MR. GREANY said yes, it could be appropriated for any other purpose. REPRESENTATIVE ELTON asked Mr. Greany: If the bill provided for a way to show that if the receipts were cut, did it not affect the budget gap? In addition, the bill would provide a way of showing that money did not need to be cut in another area to make up for the growth of receipts. Number 1189 MR. GREANY replied that it depended on how the fiscal gap was defined. Was it defined in terms of general funds or in terms of the entire state budget? The fiscal gap up to this point was looked at in terms of the general fund only. The bill would take the designated program receipts out of the fiscal gap. Number 1313 REPRESENTATIVE ELTON stated that any governmental service had to meet a market test from those that paid for the service, unlike a general fund revenue. If a segment of the economy was willing to pay for a service, it met the market test. Therefore, if a receipt was taken away, it would hurt the people willing to pay for it. He described general fund dollars as those that were coming through the tax receipts. Number 1381 MR. GREANY replied that that was the philosophy that the dedicated fund states operated under. Oregon's highway dedicated fund was established to fund its Department of Transportation. The constitutional framers rejected that type of model, however, for Alaska. In addition, Mr. Greany wondered whether the money from the motor vehicle services was a user fee or a tax, for example. Therefore, should it be used as a dedicated fund or as a general fund? It had been characterized as a general fund, but it was special because it had a program receipt designation. The division took in more money than it spent, and the rest went into the general fund. Number 1553 CHAIR JAMES announced she would hold the bill in the committee to think about it further. HB 83 - COMMERCIAL VEHICLE INSPECTIONS The next order of business to come before the House State Affairs Standing Committee was HB 83, "An Act relating to commercial motor vehicle inspections; and providing for an effective date." Number 1586 REPRESENTATIVE VEZEY explained the committee members had before them a committee substitute (0-LS0384/P, Ford, 3/24/97). The first major change was a result of Executive Order 98. The bill now addressed Title 19 instead of Title 28. REPRESENTATIVE VEZEY explained that Section 3 adopted 49 C.F.R. 396 and the provisions that existed on October 31, 1996. It also clarified the terms "interstate" and "intrastate" to mean the same thing. REPRESENTATIVE VEZEY explained that Section 4 removed a criminal penalty and inserted a civil penalty with a fine of $20,000. It did not take away the ability of the troopers to charge a criminal penalty for endangering the life of another person, however. REPRESENTATIVE VEZEY explained that Section 5 increased the penalty from $300 to $500 for a safety violation. REPRESENTATIVE VEZEY explained that Section 6 provided for an affirmative defense to prosecution under federal law because federal law changed faster than state law creating a conflict. REPRESENTATIVE VEZEY explained that Section 7 defined the term "commercial motor vehicle" so that it was synonymous with the federal law. REPRESENTATIVE VEZEY explained that Section 8 repealed existing statutes. REPRESENTATIVE VEZEY explained that Section 9 gave a July 1, 1997, effective date. Number 1804 REPRESENTATIVE BERKOWITZ asked Representative Vezey whether Section 4 also encompassed AS 19.10.365 in Section 5. Number 1833 REPRESENTATIVE VEZEY replied that the civil penalty would not require due process. TAPE 97-34, SIDE A Number 0010 REPRESENTATIVE BERKOWITZ stated that there was a new law that indicated anything over a $250 fine could entitle a person to a jury trial. REPRESENTATIVE VEZEY replied that he was aware of what Representative Berkowitz was talking about. There was ample evidence in state law where $500 was a reasonable ceiling, however. The law said a "maximum" of $500. Not all violations would be $500. Typically, the schedule ranged from $50 to $300. The statute needed to be rewritten; therefore, the maximum penalty was raised. Number 0116 REPRESENTATIVE ELTON stated Section 4 addressed AS 19.10.310 through AS 19.10.399, and Section 5 addressed AS 19.10.365. There appeared to be a conflict. Number 0180 REPRESENTATIVE VEZEY replied that AS 19.10.310 through AS 19.10.399 covered a broader area than AS 19.10.365. If a person was guilty of a leaky air line, for example, the authorities would not try to prosecute under Section 4. In addition, Section 5 addressed a list of specific mechanical items that had to be working to operate the vehicle legally, whereas Section 4 addressed the failure to implement a safety inspection program. CHAIR JAMES called on Mike Ford, drafter of the bill, to answer some of the questions. Number 0281 MIKE FORD, Attorney, Legislative Legal and Research Services, Legislative Affairs Agency, testified that the conflict was on line 22, page 2, "and except as provided in (b) of this section, a". There was also an existing misdemeanor penalty in AS 19.45.002. There were no conflicts. Number 0336 FRANK DILLON, Executive Director, Alaska Trucking Association, testified via teleconference from Anchorage. The industry supported the revisions to the bill discussed by Representative Vezey, and they would appreciate action taken on the bill. Number 0370 REPRESENTATIVE BERKOWITZ asked Representative Vezey whether Sergeant Brown signed off on the revisions to the bill. REPRESENTATIVE VEZEY replied, "Yes." Number 0412 REPRESENTATIVE VEZEY moved that the committee substitute (0- LS0384/P, Ford, 3/24/97) be adopted. There was no objection; the committee substitute was so adopted. Number 0462 REPRESENTATIVE VEZEY moved that HB 84, as amended, move from the committee with individual recommendations and the attached fiscal note(s). There was no objection; CSHB 84(STA) was so moved from the House State Affairs Standing Committee. HB 143 - REPEAL ART IN PUBLIC PLACES REQUIREMENT The next order of business to come before the House State Affairs Standing Committee was HB 143, "An Act relating to the art in public places requirements for state-owned and state-leased buildings and facilities." Number 0556 CHAIR JAMES announced that she had closed the public testimony. However, because there were only four people that wanted to testify today, she would open it up again. She called upon Shannon Planchon, Grant Administrator, Alaska State Council on the Arts, to testify via teleconference from Anchorage; however, Ms. Planchon said she was there to answer questions only. Number 0668 CAROLYN ROSEBERY testified via teleconference from Cordova. Her life had been incredibly enriched by the art that she had found. It had taken her 41 years to find that art. In Cordova, she had been exposed to art in the schools and began to discover her own gift and abilities. "I think I might be dead now if I hadn't discovered those gifts," she said. Her daughter was a National Merit Scholar and had chosen to become an artist; she was graduating this year from the University of Alaska Fairbanks with a degree in art. There would never be enough art in the world because it came from one's spirit as a human being. She asked: Do we have to start over to reinvent the wheel? There were many talented kids in Cordova, and the community had nothing to work with. There was no support; people were afraid of art because it brought out the real self. Number 0929 BARBARA SHORT, Art Teacher, Fairbanks North Star Borough School District, testified via teleconference from Fairbanks. She was also the percent-for-art program person in the schools. She said they now had 20 schools that had wonderful art installed that was being enjoyed on a daily basis by a large number of student, teachers, parents and community members. The impact of the percent-for-art in the community had been really strong. Every year there was a bill opposing the percent-for-art program and every year the school district drew up a resolution to oppose the bill. The resolution was not done yet; therefore, she read a resolution from 1995 to the committee members. MS. SHORT asked Representative Vezey why he wanted to eliminate the percent-for-art program, when schools in his area were just now getting a change to get at it. And how did his bill benefit anybody in the state? REPRESENTATIVE VEZEY, sponsor, replied that the bill was not about funding art. He was the only member of the Alaska State Legislature that had actually worked on a direct appropriation for art. The bill was about a formula program that drove state spending, reducing the accountability and responsibility of the legislature. It was not about supporting the arts. Number 1135 JUNE ROGERS was the next person to testify via teleconference in Fairbanks. Last week she sent several messages to the legislators on HB 143. In her previous comments, she'd referred to a Request for Proposals (RFP) for the Crawford School on Eielson Air Force Base. The art requested and commemorated the person for whom the building was dedicated. This type of commemoration was positive because it was based on respect for the school, the achievers, and the leaders. Art in public buildings was a subtle and powerful tool. Time and time again, studies had shown that young people who had the opportunity to be schooled in the arts were capable of more concentrated thoughts, were more creative in problem solving, and had a better understanding of other studies. In addition, art in public buildings was an investment that utilized the state's resources, its raw materials and the talents of its people. MS. ROGERS said the resulting product became part of the infrastructure that helped the visitors understand the culture of Alaska. The value of the program became more evident with each passing year. Alaskans and "Fairbankians" were proud people and eager to show the world who they are, who they were, and who they stood for, which the art reflected. In addition, the 1-percent- for-art projects constituted an "open museum" because they were accessible to all of the community members. This approach was less costly to administer than a full-scale facility necessary to house a museum or gallery. At one time, libraries were not thought to be necessary for the populace. And now it was hard to find a community that did not have a public library. MS. ROGERS said visual art is as necessary and as valuable to our culture, and should be just as available, as books in a library. There is no better way to realize the value of the state's dollar than by investing it in projects that touch all walks of life, chronicle an era, promote understanding of a culture, advance education, enhance the beauty and help attract tourists. The 1- percent-for-art program is a premium investment with a high rate of return. Number 1313 CHAIR JAMES thanked Ms. Rogers for her presentation that was sent to her on the art in the Crawford Elementary School. CHAIR JAMES announced the public testimony was closed. She said the bill would be held in the committee. HB 181 - SEPARATE SEGREGATED FUNDS: POLIT. CONTRIB The next order of business to come before the House State Affairs Standing Committee was HB 181, "An Act relating to separate segregated funds for certain political contributions from corporations and labor organizations." Number 1356 REPRESENTATIVE VEZEY, sponsor, explained that it was just ruled in the Sixth Circuit Court of Appeals in Michigan AFL-CIO v. Miller that it was a constitutional right of a legislature to impose this type of bill. The subject of the bill was financing political activities without the consent of the person contributing the money. The bill addressed Title 15.13 and set it up so that political contributions had to be made out of segregated funds that were voluntarily contributed. He reiterated that the wording had been presented before the court and had been upheld. REPRESENTATIVE BERKOWITZ asked Chair James whether there would be more testimony. CHAIR JAMES indicated there would be if somebody wanted to testify. Number 1454 BROOK MILES, Regulation of Lobbying, Alaska Public Offices Commission (APOC), Department of Administration, was the first person to testify in Juneau. The APOC did not object to the concept of the bill, but it did have some concerns over the current legislative measure. MS. MILES explained that the APOC was concerned that the reader would misinterpret the prohibitions in Section 1 to Section 4, and she suggested deleting the sections entirely. MS. MILES explained that the APOC recommended the following language in AS 15.13.160: "Separate segregated funds cannot contribute to candidates or groups that are not parties or ballot measure groups." Number 1595 CHAIR JAMES asked Representative Vezey whether the separate segregated fund was made by voluntary donations and gave the authority for the money to go into a segregated fund, or whether it was the segregated fund that made the donations. Number 1651 REPRESENTATIVE VEZEY said he'd have to go back and check the court definition that the bill was following. The funds were not from groups. They were not voluntary donations. They were used for political purposes. CHAIR JAMES asked Representative Vezey to define the funds a little bit more. REPRESENTATIVE VEZEY said he'd have to do more research to determine what the courts were defining as a segregated fund. The bill required a separation of funds, and if the funds were going to be used for political contributions, then they would have to be voluntary contributions. Number 1741 REPRESENTATIVE BERKOWITZ asked Representative Vezey whether the term was defined in the Michigan court case. REPRESENTATIVE VEZEY replied, "Yes." Number 1753 CHAIR JAMES stated that she understood the intent of the piece of legislation. She wondered, however, whether the money that went into the segregated fund was voluntary and whether the money that wasn't voluntarily contributed went someplace else. Number 1885 REPRESENTATIVE VEZEY replied that Section 6 defined a separate segregated fund as monies collected that were not voluntarily contributed - corporate or union proceeds, for example. The funds could be contributed to activities related to politics, but they could not be contributed to a candidate or to a ballot proposition. Number 1946 CHAIR JAMES replied that campaign finance reform last year allowed for only individuals to contribute to groups. She wondered, therefore, whether a mandatory deduction could go to a group and then the group could contribute. In addition, the money that went to the group had to be voluntarily, and not mandatorily, contributed. Number 1977 MS. MILES replied that the bill required that the funds be voluntary contributions. MS. MILES said the APOC was also concerned that there was not a specific definition of a separate segregated fund. The APOC recommended the following language in AS 15.13.400: "The separate segregated fund means two or more individuals who affirmatively and voluntarily consent to make campaign contributions jointly through a payroll deduction plan, administered and controlled by a union, profit, or non-profit corporation of which the individuals are members, officer, stock holders, or employees". Number 2026 CHAIR JAMES said the suggested language by the APOC indicated that an individual could not contribute to candidates or groups that were not parties or ballot measure groups, but they could contribute to parties or ballot measure groups. MS. MILES replied, "Right." CHAIR JAMES said she thought they could not contribute at all if they were segregated funds. She thought the segregated funds were for those that did not voluntarily contribute funds. The suggested language indicated that a voluntary contribution could go towards parties or ballot measure groups. The segregated fund contained the "voluntary" and not the "involuntary" funds. MS. MILES replied, "Correct." CHAIR JAMES asked Representative Vezey what happened to the involuntary funds. Number 2080 REPRESENTATIVE VEZEY replied that under AS 15.13, we recused those from political activities last year. Number 2092 MS. MILES replied that those would still be considered contributions from individuals to a group. In other words, they would be political action committee (PAC) accounts. Number 2134 CHAIR JAMES said that was the problem. "I don't think we've solved the problem here," she added. MS. MILES said those were still individuals contributing to a group. CHAIR JAMES announced the bill needed to be worked on. "I don't think it does what you think it does," she said. REPRESENTATIVE VEZEY replied, "I believe it does do what I think it does." He said he'd bring more information to the committee members because he did not know the definition of separate segregated funds. The definition was from the Sixth Circuit Court of Appeals. It was well defined; the APOC simply did not agree with the legal drafter. CHAIR JAMES replied that they did not agree because it was not perfectly clear. She needed to study the bill further. She agreed with the concept that money which would go to a group that contributed to a candidate or party should not be taken involuntarily from individuals. The contributors needed to know where their money went, and if they weren't in favor of where it went, then it shouldn't be mandated. It was hard to believe that anybody would disagree with that premise. CHAIR JAMES announced the bill would be held in the committee today. ADJOURNMENT Number 2210 CHAIR JAMES adjourned the House State Affairs Standing Committee meeting at 9:50 a.m.