Legislature(1993 - 1994)
04/14/1994 09:25 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 14, 1994
9:25 a.m.
TAPES
SFC-94, #69, Side 1 (750-end)
SFC-94, #69, Side 2 (end-000)
SFC-94, #71, Side 1 (000-end)
SFC-94, #71, Side 2 (000-125)
CALL TO ORDER
Senator Drue Pearce, Co-chair, convened the meeting at
approximately 9:25 a.m.
PRESENT
In addition to Co-chairs Pearce and Frank, Senators Rieger,
Kerttula, Sharp, and Kelly were present. Senator Jacko did
not attend the meeting.
ALSO ATTENDING: Nancy Slagle, Director, Budget Review,
Office of Management & Budget, Office of the Governor; Wendy
Redman, Vice President for University Relations, University
of Alaska, Fairbanks; Linda Rexwinkel, budget analyst,
Division of Budget Review, Office of Management & Budget; M.
Clyde Stoltzfus, Special Assistant, Commissioner's Office,
Department of Transportation & Public Facilities; Juanita
Hensley, Chief, Driver Services, Division of Motor Vehicles,
Department of Public Safety; Diane Schenker, Special
Assistant, Commissioner's Office, Department of Corrections;
Paul B. Arnoldt, Director, Division of Workers'
Compensation, Department of Labor; Dugan Petty, Director,
Division of General Services, Department of Administration;
Deena Henkins, Chief, Drinking Water & Wastewater Section,
Division of Environmental Quality, Department of
Environmental Conservation; Jetta Whittaker, Susan Sorensen,
fiscal analysts, and Mike Greany, Director, Legislative
Finance Division; representatives of the media, aides to
committee members and other members of the legislature.
SUMMARY INFORMATION
CSSB 240(FIN): An Act relating to an optional municipal tax
credit for costs of certain river habitat
protection improvements.
CSSB240(FIN) work draft "U" was ADOPTED.
Wendy Redman, Vice President for University
Relations, University of Alaska, Fairbanks,
spoke in support of the work draft. CSSB
240(2d FIN) was REPORTED OUT of committee
with a "do pass," and a zero fiscal note for
the University of Alaska.
SB 357: An Act relating to certain study,
publication, and reporting requirements by
and to state agencies; relating to certain
fees for reports; and providing for an
effective date.
Nancy Slagle, Director, Budget Review, Office
of Management & Budget, Office of the
Governor, and Linda Rexwinkel, budget
analyst, Division of Budget Review, Office of
Management & Budget, spoke to SB 357 using a
sectional handout. SB 357 was HELD in
committee.
CSSB 365(STA): An Act relating to the improvement of state
finances and fiscal accountability by
increasing fees, by collecting additional
revenue, by reducing certain program
expenditures by changing services or
eligibility requirements for programs, by
changing certain statutory limitation
periods, by providing for use of certain
electronic records, by making changes to
state agency functions or procedures
including certain reporting and planning
procedures, and by authorizing extensions for
state leases for real property if certain
savings can be achieved; and providing for an
effective date.
CSSB 365(FIN) was ADOPTED by the committee.
Nancy Slagle, Director, Budget Review, Office
of Management & Budget, Office of the
Governor; Linda Rexwinkel, budget analyst,
Division of Budget Review, Office of
Management & Budget; M. Clyde Stoltzfus,
Special Assistant, Commissioner's Office,
Department of Transportation & Public
Facilities; Juanita Hensley, Chief, Driver
Services, Division of Motor Vehicles,
Department of Public Safety; Diane Schenker,
Special Assistant, Commissioner's Office,
Department of Corrections; Paul B. Arnoldt,
Director, Division of Workers' Compensation,
Department of Labor; Dugan Petty, Director,
Division of General Services, Department of
Administration; and Deena Henkins, Chief,
Drinking Water & Wastewater Section, Division
of Environmental Quality, Department of
Environmental Conservation; spoke to CSSB
365(FIN). SB 365 was HELD in committee.
SB 376: An Act relating to fees charged by state
agencies for certain services and to
reimbursement for expenses incurred by the
state in providing certain services; and
providing for an effective date.
Scheduled but not heard.
SB 377: An Act relating to state agency fiscal
procedures; and providing for an effective
date.
Scheduled but not heard.
CS FOR SENATE BILL NO. 240(FIN):
An Act relating to an optional municipal tax credit for
costs of certain river habitat protection improvements.
CO-CHAIR PEARCE announced that SB 240 was before the
committee. She invited Wendy Redman, to join the members at
the table.
SENATOR KELLY MOVED for adoption of CSSB 240(2d FIN) version
"U". No objection being heard, it was ADOPTED.
WENDY REDMAN, Vice President for University Relations,
University of Alaska, Fairbanks, said that SB 240 amended
statute 29.45 to provide municipalities the option of
passing a local ordinance that would provide a property tax
exemption for the development of student housing facilities
at the University of Alaska. Present law did not allow the
municipalities to grant that kind of property exemption if
they wished to do so. The current law also mandated that
student rents reflect the cost of property tax if they
occupied a non-university owned facility, even if the entire
facility was dedicated to university housing. She said the
university was in the process of investigating opportunities
in Anchorage and Fairbanks in terms of student housing and
partnerships with the private sector, and a property tax
exemption would be an important tool in trying to meet the
student housing demand. It in no way would bind the local
municipality. It would be optional.
In answer to Senator Sharp, Ms. Redman said that it would be
up to the municipality to allow the tax exemption on
property that was now taxable. She said that on a forty-
year lease, the municipality could even give a portion of
the lease a tax exemption. She agreed with Co-chair Frank
that the municipality also could apply the tax exemption to
only the improvements on the property.
In answer to Senator Sharp, Ms. Redman said SB 240 did not
cover tax exempt bonds. She said the University already had
the capability of using tax exempt bonds to build housing.
Co-chair Frank and Ms. Redman commented that the tax
exemption would be used "exclusively" for housing students.
End SFC-93 #69, Side 1
Begin SFC-93 #69, Side 2
Senator Kelly MOVED for passage of SB 240(2d FIN) version
"U" from committee. No objection being heard, it was
REPORTED OUT of committee with a "do pass", and a zero
fiscal note for the University of Alaska. Co-chairs Pearce
and Frank, and Senators Kelly, Rieger and Sharp signed "do
pass."
SENATE BILL NO. 357:
An Act relating to certain study, publication, and
reporting requirements by and to state agencies;
relating to certain fees for reports; and providing for
an effective date.
Co-chair Pearce announced SB 357 was before the committee.
She invited Nancy Slagle to join the members at the table.
NANCY SLAGLE, Director, Budget Review, Office of Management
& Budget (OM&B), Office of the Governor, asked Linda
Rexwinkel, budget analyst, Division of Budget Review, Office
of Management & Budget to speak to SB 357.
LINDA REXWINKEL said that SB 357 was the culmination of a
study by the Office of Management & Budget working with
departments to identify annual reports that were either
duplicative or unnecessary, or could be amended to biennial
reports. The bill reflected those reports. She said a
sectional analysis had been provided to the committee, and a
report listing an amount that the department currently felt
the report would cost. She said this bill was seen as an
efficiency measure and meant to be non-controversial.
Ms. Rexwinkel said a study was begun with legislation in
1990 when OM&B was asked to do an analysis and to work with
departments. She then went through each section outlining
the change or repeal of certain reports. (See Attachments A
and B - Statutory Report Sectional Analysis, Division of
Budget Review, dated March 11, 1994, and final dated May 9,
1994, copy on file.)
Co-chair Pearce announced that SB 357 would be HELD in
committee.
CS FOR SENATE BILL NO. 365(STA):
An Act relating to the improvement of state finances
and fiscal accountability by increasing fees, by
collecting additional revenue, by reducing certain
program expenditures by changing services or
eligibility requirements for programs, by changing
certain statutory limitation periods, by providing for
use of certain electronic records, by making changes to
state agency functions or procedures including certain
reporting and planning procedures, and by authorizing
extensions for state leases for real property if
certain savings can be achieved; and providing for an
effective date.
Co-chair Pearce announced that SB 365 was before the
committee.
Senator Rieger MOVED for adoption of CSSB 365(FIN) version
"K" for consideration. No objection being heard, it was
ADOPTED.
Ms. Slagle said she would like department representatives to
go through the sections applying to them. She also said a
sectional analysis had been provided to the committee, and
the fiscal note packet would be complete by the afternoon.
Senator Kerttula noted that he had drafted questions
according to version "J". Co-chair Pearce noted that the
sections should be the same although some small changes had
been made.
M. CLYDE STOLTZFUS, Special Assistant, Commissioner's
Office, Department of Transportation & Public Facilities,
said he would like to address all the capital improvement
program changes in Sections 1, 2, 26, and 27. He went on to
say:
Section 1 set up a six-year program in a priority format.
It would modify AS 19.10.140. It also dropped out the
requirement to have the six-year program address maintenance
so it would only address the capital projects intended to be
built with federal dollars. The maintenance budget was
appropriated by the legislature and the department made the
best use of those dollars not knowing what they would be
from year to year.
Under Section 2, the second report to the legislature would
be an annual construction season program report, modifying
AS 19.10.150.
Under Section 26, in the six-year program, it would require
a general project description and the source of funding be
provided in that report, modifying AS 37.07.060.
The only change in Section 27 was that the report would be
done on an annual construction season rather than the fiscal
year.
End SFC-93 #69, Side 2
Begin SFC-93 #71, Side 1
In answer to Senator Sharp regarding Section 27, Mr.
Stoltzfus said that the amount of financing would be given
as a lump sum. Mr. Stoltzfus said that the estimated
project cost would be in the annual program as listed in
Section 2.
Senator Rieger said Section 2 only referred to the period
immediately following the construction season. He went on
to ask if the estimated costs would be included in the
longer range program referred to in Section 1. Mr.
Stoltzfus said that the bill would not require that.
Senator Rieger said that it would be prudent to request an
estimate of costs. He also said that the cost to complete
had not been provided by the department from the prior year.
He said that was critical information in preparing the
capital budget.
Senator Kerttula asked if Legislative Finance could provide
that information. Senator Rieger felt that they would not
be able to do that. Co-chair Pearce said she did not know
how the department could have a project on the development
list and not have an idea or estimate of what the cost was
going to be for that project. Senator Rieger agreed. Co-
chair Pearce felt cost estimates needed to be attached to
projects early-on but she said she understood why the
Commissioner was asking for this process. She said this
administration wanted to go to a lump sum appropriation for
federal projects and this legislature had no intention of
allowing that.
Senator Kerttula said that a check and balance system for
this area had been tried about 10 years ago but it had
failed. Senator Sharp agreed that cost estimates had to be
approved at an early point even though it would be a rough
estimate.
Mr. Stoltzfus said Section 3 would amend the internal
document that was used for project development. Besides a
technical word change, the department would not be required
to have a maintenance standard. It was an important
liability issue and related to highway design and accidents.
In answer to Co-chair Pearce, he said this change was
proposed by the DOT&PF but the Department of Law did concur.
Co-chair Pearce requested a letter by the Department of Law
explaining this issue. He went on to say the third change
was the deletion of the requirement that the department's
standards conform to the American Association of State
Highways and Transportation Officials (AASHTO). The reason
for this request was the difference between Alaska's roads
and other states, and because of the change in ISTEA funds
where that funding could be used in roads off the main
highway system. AASHTO's standards did not match the types
of projects that would be developed in Alaska.
Mr. Stoltzfus said that Section 28 was the requirement of
the state transportation plan. This revision acknowledged
that the state transportation plan was a requirement of the
federal legislation which provided the federal highway
funding and it must meet those federal requirements. There
was an annual plan that was required by the federal law. In
answer to Co-chair Pearce, Mr. Stoltzfus said the six year
plan was different than this requirement.
Mr. Stoltzfus said that Section 32 repealed AS 44.42.050(d)
which required the itemization of estimated costs for
proposed capital budget projects.
PAUL B. ARNOLDT, Director, Division of Workers'
Compensation, Department of Labor, said that he would speak
to Sections 4, 5 and 6, mainly housekeeping sections.
Section 4 related to the rehabilitation program under the
workers' compensation. It would require that the rehab
specialists in the field use the current federal "revised
Dictionary of Occupational Titles".
Section 5 codified a practice of the staff scheduling
doctor's appointments for the Board. The doctor's report
than goes to the Board and the Board could use them or not.
Section 6 clarified that the "current edition of the
American Medical Association Guides to the Evaluation of
Permanent Impairment" be used at the time of rating.
JUANITA HENSLEY, Chief, Driver Services, Division of Motor
Vehicles, Department of Public Safety, said Section 7
through 22 related to the Department.
Section 7 allowed the department to use an electronic record
and certify it in lieu of producing a document or a copy of
the original document. The purpose was to be able to use it
in court.
Section 8 changed the method of notice from certified mail
to first class mail.
Section 9 allowed administrative hearings to be held
telephonically.
Section 10 extended a temporary license plate from 30 days
to 60 days. This would allow dealers to submit their title
information in a reasonable time frame and allow the public
time to obtain title.
Section 11 repealed the section that required all commercial
vehicles be registered in January or the beginning of the
year. The department had been lumping these vehicles in
with the others.
Section 12 and 13 dealt with administrative hearings. Those
dealing with DWIs could be held telephonically.
Senator Kerttula said that rural electrics and cooperatives
did not pay for license plates. He felt that should be
looked at instead of increasing everyone else's fee.
In answer to Co-chair Frank, Ms. Hensley said there was
legislation pending that would add mobile homes back on
licensing.
Section 14 through 22 increased the amount reportable in an
accident damage from $500 to $1,000. She pointed out that
the average accident claim was now $1,600, and this section
had not been changed since the 60s.
Section 32 repealed the section that said special and
commercial registrations must expire in a certain month and
allowed the department to renew them on a rotating basis.
It also repealed one section pertaining to the mandatory
insurance law.
DIANE SCHENKER, Special Assistant, Commissioner's Office,
Department of Corrections, said Section 23 listed the
standard that was used, clarified that it was the standard,
and made it consistent with the standard for psychological
and physiatric care. It clarified that the department was
not obligated to provide cosmetic surgery or other medical
procedure that was not necessary for a serious condition.
In answer to Senator Kerttula, Ms. Schenker said there was a
medical review board that made the decision for medical
treatment, and any request received three levels of review
before performed. Ms. Schenker said that she was not that
familiar with all the cases but she had checked with risk
management regarding law suits. There did not seem to be
many settlements even though many complaints had been filed.
Senator Kerttula said he had been very critical of the
medical care in the prisons. Ms. Schenker said there was a
medical grievance procedure that a prisoner could use and
assistance was available for claimants. Senator Kerttula
felt reasonable medical care should be given to the people
in prisons without having to file a claim. Ms. Schenker
felt this section did not stand in the way of prisoners
getting reasonable medical care.
DUGAN PETTY, Director, Division of General Services,
Department of Administration, said that Section 24 extended
a bill, SB 129, that was passed last year, allowing the
department the ability to negotiate rent concessions of 5
percent of the base rent with ADA compliance in return for
an extension of that lease. This allowed an eighteen month
window of opportunity. This section extended that period
and allowed the department up to a 10 year extension instead
of five. A much more favorable rate could be advanced if
the department could extend the lease for ten years because
of refinancing, etc. Under SB 129, he said that 18 leases
had been renegotiated and a substantial amount of money had
been saved. He noted that if it was not a good business
deal the department would pass it up.
Senator Kerttula said he was concerned with long term leases
and would like to compare that to ownership. However, he
agreed the department was saving money with this section.
Mr. Petty agreed with Senator Kerttula's concerns but said
that the bill would not cover lease purchases. He said that
if the department would see an opportunity for lease
purchase it would be brought before the legislature but at
this time no structure was set up for this to be a
competitive process.
Mr. Petty said that Section 25 was an attempt to streamline
the process for acquisition of leases. There were over 300
leases that the department was required to replace as they
expired. Currently there were 16 leases on a month to month
backlog, 32 expiring in FY95 without renewal options, and 51
expiring with renewal options. Many of those would have to
be rebid because they would not comply with ADA. With this
section, many of the small leases, under 2500 square feet,
could be included in the small procurement category without
using a formal bid.
In answer to Senator Rieger, Mr. Petty said this section
could include initial lease acquisition. Senator Rieger
said he had a problem with this section since a lease of as
large as $225,000 could be initiated. Senator Rieger felt
that might be acceptable for a renewal.
DEENA HENKINS, Chief, Drinking Water & Wastewater Section,
Division of Environmental Quality, Department of
Environmental Conservation, said in regard to Section 30,
that it was the department's intent to audit a statistically
valid sample of these certifications annually. Either the
department would audit them or it would contract it out.
In answer to Senator Kerttula, Ms. Henkins said that the
department was taking various steps from writing a letter
regarding an oversight to dealing with a violation of
department regulations like a septic tank too close to a
well. She felt that could include refusing to sell stamps
to an engineer, or bringing that engineer's actions to the
Board depending on the seriousness of the problem.
Ms. Henkins said that the department was just starting to do
the audits and was only aware of one complaint. However,
the department had been involved in this process for about
10 years and there had been fewer complaints now, than when
the department was doing the certification themselves.
End SFC-93 #71, Side 1
Begin SFC-93 #71, Side 2
Ms. Henkins said Section 31 provided legal authority for the
department to delegate the review of plans for domestic
sewage systems to a competent government entity such as a
municipality. This had been provided for in wastewater
regulations for quite a few years and the department had
made similar delegations to communities like Wasilla,
Anchorage and Valdez. This would clarify the plan review
function.
In answer to Senator Kerttula, Ms. Henkins said the city of
Wasilla had taken delegation only for sewer connections to
their sewer system. DEC would deal with any other plan
reviews in the Wasilla area and she assumed the state could
have some liability if DEC was not overseeing Wasilla's plan
reviews in some competent fashion.
Ms. Slagle said that Section 33 allowed the departments to
develop regulations to implement the various sections that
pertain to them. Section 34 provided an immediate effective
date for that section. Section 35 gave July 1, 1994 for an
effective date for the remainder of the bill.
Senator Kerttula commented that sometimes when the law was
written in sufficient detail, it limited authorization of
regulatory imposition. He called it "lazy law."
Co-chair Pearce said that SB 365 would be HELD in committee.
BILLS SCHEDULED BUT NOT HEARD:
SENATE BILL NO. 376:
An Act relating to fees charged by state agencies for
certain services and to reimbursement for expenses
incurred by the state in providing certain services;
and providing for an effective date.
SENATE BILL NO. 377:
An Act relating to state agency fiscal procedures; and
providing for an effective date.
ADJOURNMENT
The meeting was adjourned at approximately 11:15 a.m.
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