Legislature(1995 - 1996)

02/21/1996 01:37 PM Senate CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
         SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE                         
                       February 21, 1996                                       
                           1:37 p.m.                                           
                                                                               
  MEMBERS PRESENT                                                              
                                                                               
 Senator John Torgerson, Chairman                                              
 Senator Randy Phillips, Vice Chairman                                         
 Senator Tim Kelly                                                             
 Senator Fred Zharoff                                                          
 Senator Lyman Hoffman                                                         
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
 All members present                                                           
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
 SPONSOR SUBSTITUTE FOR SENATE BILL NO. 20                                     
 "An Act establishing the Alaska municipal basic services program,             
 relating to certain programs of state aid to municipalities and               
 recipients in the unorganized borough; and providing for an                   
 effective date."                                                              
                                                                               
 SENATE BILL NO. 207                                                           
 "An Act authorizing the issuance and sale of revenue bonds to fund            
 public wastewater systems, nonpoint source water pollution control            
 projects, including solid waste management systems, and estuary               
 conservation and management projects; authorizing the use of the              
 Alaska clean water fund to pay and secure the bonds and to pay                
 costs related to issuance and administration of  the bonds;                   
 authorizing certain measures to secure payment of the bonds; and              
 amending Alaska Rule of Civil Procedure 3."                                   
                                                                               
 SENATE BILL NO. 229                                                           
 "An Act relating to employment contributions and to making the                
 state training and employment program a permanent state program;              
 and providing for an effective date."                                         
                                                                               
  PREVIOUS SENATE COMMITTEE ACTION                                             
                                                                               
 SB  20 - See Community & Regional Affairs minutes dated 2/22/95,              
          2/7/96, 2/14/96.                                                     
                                                                               
 SB 207 - See Community & Regional Affairs minutes dated 2/5/96,               
          2/14/96.                                                             
                                                                               
 SB 229 - See Community & Regional Affairs minutes dated 2/7/96,               
          2/12/96.                                                             
                                                                               
  WITNESS REGISTER                                                             
                                                                               
 Bill Rolfzen                                                                  
 Division of Municipal Assistance                                              
 Department of Community & Regional Affairs                                    
 P.O. Box 112100                                                               
 Juneau, AK 99811-2100                                                         
  POSITION STATEMENT:   Offered information on CSSSSB 20(CRA)                  
                                                                               
 Lamar Cotten, Deputy Commissioner                                             
 Department of Community & Regional Affairs                                    
 P.O. Box 112100                                                               
 Juneau, AK 99811-2100                                                         
  POSITION STATEMENT:   Testified in support of CSSSSB 20(CRA), with           
      exception of one provision                                               
                                                                               
 Kevin Ritchie, Executive Director                                             
 Alaska Municipal League                                                       
 217 2nd St.                                                                   
 Juneau, AK 99801                                                              
  POSITION STATEMENT:   Testified in support of CSSSSB 20(CRA)                 
                                                                               
 Marie Sansone, Assistant Attorney General                                     
 Civil Division                                                                
 Department of Law                                                             
 P.O. Box 110300                                                               
 Juneau, AK 99811-0300                                                         
  POSITION STATEMENT:   Offered information on proposed amendments to          
      SB 207                                                                   
                                                                               
 Rebecca Nance, Director                                                       
 Division of Employment Security                                               
 Department of Labor                                                           
 P.O. Box 25509                                                                
 Juneau, AK 99802-5509                                                         
  POSITION STATEMENT:   Offered information on SB 229                          
                                                                               
 Mark Mickelson                                                                
 Division of Community & Rural Development                                     
 Department of Community & Regional Affairs                                    
 P.O. Box 112100                                                               
 Juneau, AK 99811-2100                                                         
  POSITION STATEMENT:   Offered information on SB 229                          
                                                                               
 Chris Miller, Chief                                                           
 Research Analysis Section                                                     
 Department of Labor                                                           
 P.O. Box 25509                                                                
 Juneau, AK 99802-5509                                                         
  POSITION STATEMENT:   Offered information on SB 229                          
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
  TAPE 96-10, SIDE A                                                           
 Number 001                                                                    
                                                                               
  CHAIRMAN TORGERSON  called the Senate Community & Regional Affairs           
 Committee meeting to order at 1:37 p.m.                                       
                                                                               
        SSSB  20 ALASKA MUNICIPAL BASIC SERVICES PROGRAM                      
                                                                              
  SENATOR TORGERSON  brought CSSSSB 20(CRA), which was adopted by the          
 committee on 2/7/96, before the committee as the first order of               
 business, and directed attention to a proposed amendment as well as           
 a new fiscal note from the Department of Revenue.  He then asked              
 Bill Rolfzen of the Department of Community & Regional Affairs to             
 explain the department's amendment.                                           
                                                                               
 Number 030                                                                    
                                                                               
  BILL ROLFZEN , Division of Municipal & Regional Assistance,                  
 Department of Community & Regional Affairs, explained that when a             
 new borough incorporates under the existing Municipal Assistance              
 Program, its base amount assessment is set at the same amount as a            
 borough that is closest in population.  The amendment would                   
 eliminate one borough as far as determining base amounts.  He                 
 referred to a spreadsheet which lists 13 boroughs.  For 12 of the             
 boroughs, the average base amount is approximately $94,000, and the           
 remaining  borough's base amount is $1.2 million.  By excluding               
 that one borough, it will be a much more equitable determination of           
 base amount for future boroughs.                                              
                                                                               
 Number 055                                                                    
                                                                               
  SENATOR RANDY PHILLIPS  moved the adoption of the following                  
 amendment to CSSSSB 20(CRA):                                                  
                                                                               
 Amendment No. 1                                                             
                                                                               
 Page 5, line 27:  After "incorporation" insert ",excluding each              
 borough with a per capita full and true property value exceeding              
 $500,000"                                                                    
                                                                               
 Hearing no objection, the Chairman stated the motion carried.                 
                                                                               
 Number 065                                                                    
                                                                               
  LAMAR COTTEN , Deputy Commissioner, Department of Community &                
 Regional Affairs, voiced the department's support for of the intent           
 and language of the bill, with the exception of one the bill's                
 provisions which changes the date that checks are received from               
 February 1 to July 31.  In response to an inquiry from Senator                
 Torgerson, he stated the department, as part of the Administration,           
 supports the 8 percent cut recommended by the Governor.                       
                                                                               
  KEVIN RITCHIE , Executive Director, Alaska Municipal League,                 
 commenting on the Administration's position on the fiscal note,               
 said the bill itself has an internal equity to it, and that is a              
 very important part of it.  He added the question of the funding is           
 a whole separate issue and, certainly, the Legislature doesn't have           
 to take the recommendation of the 8 percent cut as the one it goes            
 with.                                                                         
                                                                               
 Number 103                                                                    
                                                                               
  SENATOR ZHAROFF  asked for assurance there would be no problem with          
 Metlakatla's allocation.   BILL ROLFZEN  responded Metlakatla                 
 currently participates in revenue sharing as an unincorporated                
 community, and under municipal assistance, as a municipality, this            
 bill does not change that.                                                    
                                                                               
 Number 125                                                                    
                                                                               
  SENATOR RANDY PHILLIPS  moved CSSSSB 20(CRA), as amended and with            
 the accompanying fiscal note, be passed out of committee with                 
 individual recommendations.  Hearing no objection, it was so                  
 ordered.                                                                      
                                                                               
         SB 207 REVENUE BONDS: WATER & WASTE PROJECTS                        
                                                                               
 Number 130                                                                    
                                                                               
  SENATOR TORGERSON  brought SB 207 before the committee as the next           
 order of business.  He directed attention to four proposed                    
 amendments for the committee's consideration.                                 
                                                                               
  SENATOR RANDY PHILLIPS  moved adoption of the following Amendment            
 No. 1:                                                                        
                                                                               
 Amendment No. 1                                                             
                                                                               
 Page 6, line 6:  After "in" insert "the current fiscal year and"              
                                                                               
 Page 8, line 12:  After "letters" insert "and lines"                          
                                                                               
 Number 160                                                                    
                                                                               
  MARIE SANSONE , Assistant Attorney General, Civil Division,                  
 Department of Law, said she worked closely with the Department of             
 Environmental Conservation and the Department of Revenue in                   
 preparing SB 207.  The amendment was proposed by the Department of            
 Revenue to add the term "the current fiscal year" which was                   
 inadvertently omitted when the statute was being drafted.                     
                                                                               
 SENATOR TORGERSON asked if there was objection to the adoption of             
 Amendment No. 1, and hearing none, he stated it was adopted.                  
                                                                               
 Number 175                                                                    
                                                                               
  SENATOR RANDY PHILLIPS  moved adoption of the following Amendment            
 No. 2:                                                                        
                                                                               
 Amendment No. 2                                                             
                                                                               
 Page 2, line 7:  After "authorized" insert ",subject to (b) of this           
                 section"                                                      
                                                                               
 Page 2, line 13:  Insert a new subsection to read:  "(b)   The                
 state bond committee may not issue more than $15,000,000 in revenue           
 bonds during a fiscal year, excluding refunding bonds.  The total             
 amount of revenue bonds outstanding at any one time may not exceed            
 $150,000,000, including principal and interest owed on the bonds."            
                                                                               
  SENATOR TORGERSON  explained the amendment puts a cap on the revenue         
 bonds by setting out that there can be no more than $15,000,000 in            
 revenue bonds sold in one year, and it cannot exceed $150,000,000             
 for the total program.                                                        
                                                                               
  MARIE SANSONE  stated the Administration's support for the language.         
                                                                               
  SENATOR ZHAROFF  said he has no problem with setting a cap, but his          
 concern is having some kind of safety mechanism for the small                 
 community that may have the ability to take advantage of the                  
 program, but could be excluded because they are bumping up against            
 the cap.   SENATOR TORGERSON  said an attempt was made to draft some          
 language to address his concern, but there were problems with its             
 interpretation.   MARIE SANSONE  pointed out the intent language in           
 Section 1 of the bill does recognize that the financing of needed             
 water quality improvements is the purpose of this legislation.                
 Also, there is another provision which requires the state bond                
 committee to consider that in all its decisions.                              
                                                                               
  SENATOR TORGERSON  asked if there was objection to the adoption of           
 Amendment No. 2.  Hearing none, he stated Amendment No. 2 was                 
 adopted.                                                                      
                                                                               
 Number 235                                                                    
                                                                               
  SENATOR KELLY  moved adoption of the following Amendment No. 3:              
                                                                               
 Amendment No. 3                                                             
                                                                               
 Page 7, line 19 - 21:  Delete all material.                                   
                                                                               
 Page 8, lines 27 - 28:  Delete "The provisions of this section               
 shall be liberally construed in order to carry out the purposes for           
 which they were enacted."                                                    
  MARIE SANSONE  said the term "liberal construction," when talking            
 about statutes, is a very standard phrase.  It is a term that is              
 recognized by the State Supreme Court.  Because this is a remedial            
 statute that is designed to achieve the public purpose of promoting           
 public health and welfare, the statute will have a liberal                    
 construction if that ever became an issue.  She said it does serve            
 a purpose to leave this provision in the statute, but she suggested           
 if the committee wants to change it, the term "broadly construed"             
 could be used in its place.                                                   
                                                                               
  SENATOR KELLY  voiced his concern that if, in fact, it does goes to          
 court he doesn't want them to "liberally construe" that language,             
 and he doesn't want to give the court that option.                            
                                                                               
  SENATOR TORGERSON  asked if there was objection to the adoption of           
 Amendment No. 3, and hearing none, he stated it was adopted.                  
                                                                               
 Number 305                                                                    
                                                                               
 SENATOR HOFFMAN moved adoption of the following Amendment No. 4:              
                                                                               
 Amendment No. 4                                                             
                                                                               
 Page 2, line 5:  Delete "state agencies" and insert "other                    
      qualified entities"                                                      
                                                                               
 Page 9, line 18:  Delete "state agencies" and insert "other                   
       qualified entities"                                                     
                                                                               
 Page 9, line 20:  Delete "state agencies" and insert "other                   
       qualified entity"                                                       
                                                                               
 Page 9, line 22:  Delete "state agencies" and insert "other                   
       qualified entity"                                                       
                                                                               
 Page 10, line 11:   Delete "state agency" and insert "other                
     qualified entity                                                         
                                                                               
 Page 11, line 10:  Following "1" insert "other qualified entity"           
 means an intermunicipal or interstate agency as those terms are               
 used in 33 US>C. 1383, and may include an authority, corporation,             
 instrumentality, enterprise, or other entity formed through an                
 agreement between a municipality and one or more other governmental           
 entities under AS 29.35.010(13) or under art. X. sec. 13,                     
 Constitution of the state of Alaska, or between a municipality and            
 a regional housing authority under AS 18.55.996(b);                          
                                                                               
   (2)"                                                                      
                                                                               
 Page 11, lines 22 - 25:  Delete ";                                            
                                                                               
   (2)  "state agency" means a department, authority, public                  
 corporation, instrumentality, or other administrative unit of the             
 executive branch of state government"                                        
                                                                               
                                                                               
  SENATOR TORGERSON , explaining the amendment, said the intent is to          
 take out the references and definition of "state agency" and to               
 insert "other qualified entity" and its definition in its place.              
 A "state agency" is not an eligible entity because state agencies             
 cannot dedicate funds to the repayment of their debt obligations.             
 Senator Hoffman also requested municipalities and regional housing            
 authorities be added so they could enter into joint agreements.               
                                                                               
  MARIE SANSONE  stated the department supports the amendment.                 
                                                                               
 Number 310                                                                    
                                                                               
 SENATOR TORGERSON asked if there was objection to the adoption of             
 Amendment No. 4, and hearing none, he stated it was adopted.  He              
 also stated the four adopted amendments would be incorporated into            
 a committee substitute.                                                       
                                                                               
 Number 315                                                                    
                                                                               
  SENATOR RANDY PHILLIPS  moved that CSSB 207(CRA) and the                     
 accompanying fiscal notes be passed out of committee with                     
 individual recommendations.  Hearing no objection, it was so                  
 ordered.                                                                      
                                                                               
 Number 325                                                                    
                                                                               
          SB 229 STATE TRAINING & EMPLOYMENT PROGRAM                         
                                                                               
  SENATOR TORGERSON  brought SB 229 before the committee as the final          
 order of business.   He noted there were three proposed amendments            
 before the committee for its consideration.                                   
                                                                               
  SENATOR RANDY PHILLIPS  moved adoption of the following Amendment            
 No. 1:                                                                        
                                                                               
 Amendment No. 1                                                             
                                                                               
 Page 4, line 17:  Delete "may" and insert "shall"                             
                                                                               
 Page 4, line 20:  Delete "pilot project"                                      
                                                                               
 Page 4, line 21:  Delete "If" and insert "When"                               
                                                                               
 Page 5, line 5 - 6:  Delete "a pilot project grant for a period of            
                      up to two years" and insert "grants"                     
                                                                               
 Page 5, line 7:  Delete "an"                                                  
                                                                               
 Page 5, line 8:  Delete "training entity" and insert "training                
      entities.  A training entity is eligible for a                           
      grant under this section"                                                
                                                                               
 Page 5, line 16:  Delete "pilot project"                                      
                                                                               
  REBECCA NANCE , Director, Employment Security Division, Department           
 of Labor, stated the department had no objection to the amendment.            
                                                                               
  SENATOR TORGERSON  asked if there was objection to the adoption of           
 Amendment No. 1, and hearing none, he stated it was adopted.                  
                                                                               
 Number 352                                                                    
                                                                               
  SENATOR RANDY PHILLIPS  moved the adoption of the following                  
 Amendment No. 2:                                                              
                                                                               
 Amendment No. 2                                                             
                                                                               
 Page 5, line 1:  After "." insert:  "The department shall give                
 preference to projects and services that train individuals in                 
 industries identified in the resident hire report required under AS           
 36.10.130 as employing a disproportionate  percentage of                      
 nonresident individuals."                                                     
                                                                               
  SENATOR TORGERSON  explained the amendment directs the department to         
 put as a number one priority training people in Alaska to fill the            
 positions that are held by nonresident workers.                               
                                                                               
  REBECCA NANCE  stated the department wants to continue targeting             
 local hire.                                                                   
                                                                               
 Number 380                                                                    
                                                                               
  SENATOR TORGERSON  asked if there was objection to the adoption of           
 Amendment No. 2, and hearing none, he stated it was adopted.                  
                                                                               
 Number 385                                                                    
                                                                               
  SENATOR RANDY PHILLIPS  moved adoption of the following Amendment            
 No. 3:                                                                        
                                                                               
 Amendment No. 3                                                             
                                                                               
 Page 5, line 19:  Delete "established for the council"                        
                                                                               
  REBECCA NANCE  stated the amendment was recommended by the                   
 Department of Labor.                                                          
                                                                               
  SENATOR TORGERSON  asked if there was objection to the adoption of           
 Amendment No. 3, and hearing none, he stated it was adopted.  He              
 also stated the three amendments would be incorporated into a                 
 committee substitute, which brought the committee substitute before           
 the committee.                                                                
                                                                               
 Number 400                                                                    
                                                                               
  SENATOR KELLY  noted there were two different fiscal notes on the            
 legislation, and he asked what the differences were.   SENATOR                
 TORGERSON  responded that the original fiscal notes did not add up,           
 so corrected fiscal notes were requested.                                     
                                                                               
  SENATOR KELLY  said we are talking about over $3 million being               
 allocated for the program, but grants in 1994 totaled just a little           
 over $1 million.  He asked where the rest of the money is going.              
                                                                               
  MARK MICKELSON , Division of Community & Rural Development,                  
 Department of Community & Regional Affairs, directed attention to             
 a "flow chart" which he said would hopefully provide a picture of             
 the method by which the STEP funds will flow within the state.  He            
 said a series of new graphs has been provided to the committee                
 depicting how the 1995 funds were utilized at each of the SDA or              
 the private industry council levels.  The listing originally                  
 provided to the committee was a listing of the "larger grants" that           
 were let as a result of the competitive RFP process.  The balance             
 of the true program funds, or grant funds that have gone on as                
 depicted in the new chart, is spent on eligible clients and on                
 eligible services.  They are just done through a different process            
 in terms of how it is recorded.                                               
                                                                               
  SENATOR KELLY  said it still doesn't show where the other $1.5               
 million is going.   MR. MICKELSON  said the funding is recorded, it           
 is tracked. A summary report is provided to the Department of Labor           
 every year identifying all the program activities.  For example, if           
 someone went to a classroom training program at AVTEC or the                  
 University of Alaska, etc., that has been recorded as an actual               
 expenditure.  However, they do not have the records of the hundreds           
 of transactions of all those small vouchers.  He said they are just           
 providing the straight tuition and the normal costs to send                   
 somebody to one of those training programs.                                   
                                                                               
  SENATOR RANDY PHILLIPS  observed that even though they may not               
 record it, they still must have some kind of accounting for those             
 small voucher transactions.   MR. MICKELSON  agreed that was correct.         
 He said for every individual who is served by this program, a file            
 is maintained that contains the full application, certification               
 that the information provided is true, eligibility verification,              
 etc., so that information does exist.                                         
                                                                               
  SENATOR KELLY  commented there are a whole lot of individuals who            
 are paying their own tuition and their own transportation, and yet,           
 if some state employee graces you, then you get it for nothing.               
  MR. MICKELSON  responded they are trying to make the program                 
 accessible and available where people would normally go for                   
 assistance for employment, for unemployment insurance.  He conceded           
 they perhaps could do a better job at making the service better               
 known to everyone.   He also clarified that tuition at the                    
 University of Alaska is an allowable expense if it is compatible              
 with someone's career goals.  He added that they do not allow                 
 people to pursue long-term educational goals just for the sake of             
 going to school.  The program is focused on reattachment to the               
 labor force.                                                                  
                                                                               
  SENATOR KELLY  asked if they would send any of their clients out of          
 state for training.   MR. MICKELSON  answered that's generally not            
 the case, but it would be possible if a very specialized training             
 course or program was not available in the state of Alaska.                   
 However, the individual still must meet all the criteria.                     
                                                                               
  SENATOR KELLY  asked if there is a parallel with the STEP program            
 and the training provisions contained in the welfare reform                   
 legislation.   SENATOR TORGERSON  said he has discussed this with             
 Mike Andrews of the Alaska Human Resource Investment Council and              
 this does not parallel the welfare reform legislation, although the           
 welfare reform creates another training program.  The STEP program            
 is driven by employee contributions so it's really not general fund           
 money.                                                                        
                                                                               
  TAPE 96-10, SIDE B                                                           
 Number 001                                                                    
                                                                               
 After brief discussion on how the employer/employee contributions             
 are calculated,  SENATOR TORGERSON  invited Chris Miller to the table         
 to explain the process.                                                       
                                                                               
 Number 060                                                                    
                                                                               
  CHRIS MILLER , Chief, Research Analysis Section, Department of               
 Labor, explained that when they calculate the UI tax rate, the                
 total contribution is separated at an 82 percent contribution from            
 the employer and 18 percent from the employee.  The tax rate is               
 determined by multiplying the 82 percent times what they call their           
 average benefit cost rate.  The same thing is then done for the               
 employee.  He added it is possible that the employee tax will vary,           
 but it varies only slightly over time.  The last time the employee            
 tax rate changed was in 1991 when it dropped to 0.5 percent.  The             
 0.5 percent is on the wages earned up to the taxable wage base,               
 which is currently at $24,400.                                                
                                                                               
 To clarify the process, Mr. Miller said, as an example, for the               
 current year the maximum an employee would pay, based on the                  
 taxable wage base of $24,400, would be $122, and the average an               
 employer would pay, discounting the varying rates they have, would            
 be $529 for a maximum.                                                        
  SENATOR KELLY  asked, if he, as an employer, is paying 2.17 percent          
 for domestic help, what's the highest rate somebody is paying and             
 how much that employee is paying.   MR. MILLER  responded the highest         
 rate is 5.4 percent for the employer and the employee is still at             
 0.5 percent.  He also clarified for Senator Kelly that the                    
 employers at the 5.4 percent rate are penalty employers.  These are           
 employers who have not met various reporting requirements, or for             
 other reasons they are paying a penalty rate.                                 
                                                                               
   Number 215                                                                  
                                                                               
  SENATOR KELLY  commented that the program is quickly becoming  a             
 funding mechanism, with DOL, DCRA and AHRIC getting parts of the              
 pot.  He asked if any of the numbers go through the budget process.           
  ARBE WILLIAMS , Director, Administrative Services, Department of             
 Labor, replied they do and they are listed in various places in the           
 Department of Labor budget.   SENATOR KELLY  asked why they are               
 asking for more money this year.   MS. WILLIAMS  said the difference          
 between the total grant amount is what they estimate will be                  
 collected from one-tenth of employees' salaries.                              
                                                                               
  SENATOR KELLY  wondered who is getting this money because he doesn't         
 know anybody who his benefiting from this program.   MARK MICKELSON           
 related that the system is capable, in the future, of providing  a            
 lot of information on where individuals are being served, what they           
 are enrolled in, etc., if that kind of information is desired.  He            
 added there are over 6,000 Alaskans who are very pleased this                 
 program has been in place.  He has seen a lot of good things done             
 with the program, and he believes they can provide the kind of                
 accountability and information that would give assurance that this            
 program is well designed in intention.                                        
                                                                               
 Number 320                                                                    
                                                                               
  SENATOR TORGERSON  asked about the possibility of finding a cap so           
 that no more than a certain amount of money is taken out for                  
 administration.  He said it is an employee giving money and it is             
 funding other segments of government.   MS. WILLIAMS  spoke to                
 reorganization efforts that are going on in the Employment Security           
 Division, and she said they are well aware of the fact                        
 administratively, at all levels, that if they are not efficient, it           
 costs their programs.                                                         
                                                                               
 Number 358                                                                    
                                                                               
  SENATOR TORGERSON  stated he was going to hold SB 229, and he                
 requested that the department provide more detail on where this               
 money goes to balance the $3.6 million figure.  He also believes it           
 is a good idea to look at the possibility of a cap to limit the               
 amount of overhead for the program.                                           
                                                                               
 There being no further business to come before the committee, the             
 meeting was adjourned at 2:55 p.m.                                            
                                                                               

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