Legislature(1997 - 1998)
02/05/1997 09:07 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
February 5, 1997
9:07 A.M.
TAPES
SFC-97, # 30, Sides 1 & 2 (000-589)
SFC-97, # 31, Side 1 (000-085)
CALL TO ORDER
Senator Drue Pearce, Co-chair, convened the meeting at
approximately 9:07 A.M.
PRESENT
In addition to Co-chair Pearce, Senators Donley, Torgerson,
Phillips and Adams were present when the meeting was
convened. Co-chair Sharp and Senator Parnell arrived as the
meeting was in progress.
Also Attending:
Senator Green; Bill Rolfzen, Program Administrator,
Department of Community and Regional Affairs; Vernon Voss,
Treasury Division, Department of Revenue; Boyd Brownfield,
Deputy Commissioner, Department of Transportation and Public
Facilities; Sam Kito, III, Special Assistant, DOTPF; Frank
Sauser, Director, Division of Institutions, Department of
Corrections; Dean Guaneli, Chief Assistant Attorney General,
Criminal Division, Department of Law; Mike Greany, Director,
Legislative Finance Division; fiscal analysts and aides to
committee members.
Also Attending Via Teleconference:
Jerome Selby, Mayor, Kodiak Island Borough.
SUMMARY INFORMATION
SB 29 - STATE AID TO MUNICIPALITIES & UNORG. BOR.
Senator Torgerson MOVED Amendment #4 and Senator Adams
objected. After discussion between committee members, Bill
Rolfzen and Jerome Selby, the committee ADOPTED Amendment #4
by a vote of 5 to 1. Lengthy discussion was had between
committee members and Vernon Voss concerning the
accompanying fiscal note. Senator Torgerson MOVED for
adoption of CSSB 29(FIN) with individual recommendations
then withdrew his motion. He then MOVED for adoption of
CSSB 29(FIN) with individual recommendations accompanied by
a Senate Finance Committee fiscal note reflecting a loss of
revenue for FY 98 only. Without objection, CSSB 29(FIN) was
REPORTED OUT of committee with individual recommendations
and a Senate Finance Committee fiscal note of 1,005.4.
SB 56 - BUSINESS SIGNS/OUTDOOR ADVERTISING
Senator Green testified on behalf of the bill. Boyd
Brownfield and Sam Kito III explained the administration's
opposition to the bill. Senator Donley MOVED for passage of
SB 56 with the previous fiscal note. Without objection, SB
56 was REPORTED OUT of committee with individual
recommendations and a $21.5 fiscal note from Department of
Transportation and Public Facilities.
SB 1 - "NO FRILLS" PRISON ACT
Senator Donley testified on behalf of the bill. Also
speaking in favor of the bill was Frank Sauser. Senator
Donley MOVED Amendment #1, Senator Adams objected, then
withdrew his objection. Without further objection,
Amendment #1 was ADOPTED. Amendment #2 was not offered.
Senator Donley MOVED Amendment #3. Senator Adams objected.
Dean Guaneli spoke in opposition to the amendment. Senator
Donley withdrew Amendment #3. Senator Adams MOVED Amendment
vote of 1 to 6. Co-chair Sharp MOVED for adoption of CSSB
1(FIN). Senator Adams objected. On a vote of 6 to 1 in
favor, CSSB 1(FIN) was REPORTED OUT of committee with
individual recommendations accompanied by zero fiscal notes
from Department of Public Safety and Department of Law and a
$20.0 fiscal note from Department of Corrections.
SENATE BILL NO. 29
"An Act relating to certain programs of state aid to
municipalities and recipients in the unorganized borough;
and providing for an effective date."
Co-chair Pearce noted that SB 29 had been heard earlier and
that there was an additional proposed amendment along with a
spreadsheet of three specific examples relating to the bill
(copy in bill file). Senator Torgerson MOVED the amendment.
After objection by Senator Adams, a discussion of action on
previous amendments and a reading of previous minutes, it
was determined that the proposed amendment was Amendment #4.
Senator Adams maintained his objection to the amendment.
Senator Torgerson explained that Amendment #4 would treat
all municipalities equally if there were reductions in the
Safe Community Fund. The bill is intended to raise the
minimum entitlement to $40,000 and Amendment #4 would insure
that reductions were taken equitably.
Senator Adams expressed doubt that communities across the
state were in agreement with the provision. He requested
that the department address what the effect would be if,
instead of putting a monetary figure in the bill, the
appropriation to the Safe Community Fund for a fiscal year
was less than the FY98 amount.
BILL ROLFZEN, Program Administrator, Department of Community
and Regional Affairs, explained that the municipalities
would be held harmless from a cut to their minimum
entitlement for one year and after that all communities
would be cut according to the illustration in the
spreadsheet.
JEROME SELBY, Mayor, Kodiak Island Borough, testified via
teleconference that the proposed amendment was debated
heavily among the municipalities and it became clear that in
order to maintain unanimity among the communities they would
have to agree that cuts would be equitably distributed.
Alaska Municipal League supports the amendment. Other
changes being made by SB 29 brings more accountability to
the entire use of the funds thereby justifying continued
funding at the current level.
Senator Adams maintained his objection. By a VOTE of 5 to 1,
Amendment #4 was ADOPTED. Voting in favor were Co-chair
Pearce, Senators Phillips, Parnell, Donley and Torgerson.
Senator Adams was opposed.
The presence of Co-chair Sharp was noted.
Co-chair Pearce asked for clarification of the accompanying
fiscal note regarding an interest loss from choosing to make
a single lump payment to municipalities earlier in the year.
She understood there would be some loss in the
Constitutional Budget Reserve (CBR) fund if the interest
wasn't paid back, but the money would earn interest for
twelve months as it builds back up. She did not believe
interest would be lost every succeeding year.
VERNON VOSS, Treasury Division, Department of Revenue,
explained that unless an additional $29 million was added as
borrowed by the general fund from the CBR fund, the CBR fund
would have $29 million less to earn interest on. The
general fund, in that it is borrowing, is not gaining or
losing interest, because it does not pay interest to the
CBR. The following year the same scenario takes place
because each year money is borrowed to replace what is paid
out early, so there continues to be a loss of interest to
the CBR fund. A new amount gets borrowed each year. Co-
chair Pearce commented that it is a paper transaction, but
in a virtual sense the money is sitting in one fund or
another and earning interest for twelve months before the
transfer. Once it is done one time, the next twelve months
of interest earnings begins in July rather than November.
Mr. Voss said that would be true if $29 million was only
being paid out one time, but it is being paid each year. He
gave the example of a person continuing to borrow from their
interest-earning savings account into their checking account
so each year there is an incremental loss of interest income
in the savings account. Even though the general fund is
earning interest, there is no excess money and if money is
paid out early, the state must in turn borrow from the CBR,
so there is a net borrowing for the entire fiscal year. Co-
chair Pearce pointed out that receipts come in all year and
earn interest. Mr. Voss stated that was incorrect because
they are used to pay out funds. He noted the significant
cash outflow that occurs in July because of seasonality of
capital expenditure projects and that requires borrowing
because cash inflow doesn't offset the outflow during the
summer months. Money that would come in later in the year is
being moved forward in the year when there is already a
deficit on a monthly basis. Co-chair Pearce said part of the
reason there is a deficit is because of the sweep-back to
the CBR and the money is earning interest after it is
received. Mr. Voss added that it was only if there was an
excess in the general fund, but the fiscal note reflects
that there is no excess in the general fund because it's
paid back to the CBR fund. Co-chair Pearce stated the CBR
fund is making interest on the money and that only half of
the picture was being shown. There was additional
explanation by Mr. Voss and Co-chair Pearce restated her
position that it was only a one-year loss.
Senator Torgerson MOVED for adoption of CSSB 29(FIN) with
individual recommendations. Co-chair Sharp opposed the
fiscal note, believing it was in error. Senator Torgerson
then withdrew his motion. He then MOVED for adoption of
CSSB 29(FIN) with individual recommendations accompanied by
a Senate Finance Committee fiscal note reflecting a loss of
revenue for FY 98 only. Without objection, CSSB 29(FIN) was
REPORTED OUT of committee with individual recommendations
and a Senate Finance Committee fiscal note of $1,005.4.
SENATE BILL NO. 56
"An Act relating to tourist oriented directional signs that
are 90 inches in width and 18 inches in height, relating to
penalties for violations related to outdoor advertising, and
annulling a regulation of the Department of Transportation
and Public Facilities."
Co-chair Pearce invited Senator Lyda Green, sponsor of SB
56, to address the committee. She noted the bill had passed
the legislature last year and was vetoed.
SENATOR LYDA GREEN pointed out that SB 56 is identical to
last year's legislation. The size parameters are similar to
or smaller than the types of signs in the Tourist Oriented
Directional Sign (TODS) program. If the experimental
program that oversees the TODS program were challenged,
there is a possibility that those with TODS might have to
remove the signs, or that the program would go away. The
legislation instructs Department of Transportation and
Public Facilities to use information gathered by their task
force, develop a program, a permitting application process,
write the regulations and direct installation. There is
ample oversight to protect scenic views. Senator Green
concluded her remarks by requesting the committee's support
of the bill.
Senator Adams inquired about the uniformity of signs
depending on whether it was a logo type sign or a TODS.
Senator Green responded that it would be the same or similar
to the types of signs on highways now.
Co-chair Pearce asked the governor's reasoning for the veto.
Senator Green recalled that the legislation was a threat to
the proliferation of signs. Senator Phillips requested to
hear from the department.
BOYD BROWNFIELD, Deputy Commissioner, Department of
Transportation and Public Facilities, informed the committee
that the administration objected to a change in signage laws
which would significantly perpetuate an increase of signs
and affect the scenic beauty of Alaska highways. The
objections were twofold. One was a concern about
establishing a category of signs on land over which the
state does not have jurisdictional control because it would
be difficult to enforce and cost the state for additional
legal administrative burden. It was not in the best
interest of the state. The other issue was that SB 56
reduces the penalty for an offense relating to an outdoor
advertising sign from a misdemeanor to a simple violation.
A misdemeanor carries an accumulation of increased
seriousness to multi-offenses, whereas a violation has no
added effect. Presently, the department is able to enforce
a stretch of highway every two to four years. Reducing the
penalty reduces the issue to a business expense for those
that intend to violate the regulation because they can just
pay a fine every few years. Mr. Brownfield summarized that
at the governor's direction, the department and others had
been working on a draft regulation that would better
accommodate various businesses along the highway. He
directed Mr. Kito to address that subject.
SAM KITO, III, Special Assistant to the Commissioner,
Department of Transportation and Public Facilities,
explained that as a result of the task force on signage,
they were putting together a schedule to prepare regulations
that would take care of concerns over outdoor advertising
and signage. After allowing an adequate public comment
period, they expect regulations to be ready for transmittal
to the Lieutenant Governor by mid-September. The
regulations would include three components of signs beyond
what is currently being done: programs for TODS, logo and
kiosks. Those would not be ready before the end of the
calendar year. Senator Phillips questioned why this was not
done last July. Mr. Kito replied that a task force was
assembled, held public meetings to gather information, and
just completed their report the first week of January.
Senator Donley clarified that the fine for a penalty can
range between $50 to $1000 and therefore could escalate with
repeat offenses. Mr. Brownfield concurred but reiterated
that reducing the penalty doesn't carry the weight of
enforcement and sends the wrong message. In response to a
different query, Mr. Brownfield expanded on his opinion of
the penalty being seen as a "business expense" by some.
Senator Donley commented that the IRS would not allow it as
a business expense.
Senator Adams questioned why the sponsor wouldn't want to
help with enforcement and implementation, referring to the
reduction of the penalty. Senator Green informed him that
the misdemeanor provides for imprisonment for the owner of
an illegal sign, yet only simple fines had been enforced.
She also noted, based on letters and complaints, that
enforcement was more vigorous than two to four years. Co-
chair Sharp supported that observation, referring to
complaints he also received and knowledge of DOTPF storage
lots of illegal signs. He commented that although no other
states allow placement of official directional signs on
private property due to the difficulties, Interstate 10,
which crosses the desert in California, has signs that are
"4 stories high and 100 yards wide" along that federal
highway. Mr. Brownfield remarked that was exactly the
proliferation the administration objects to. He noted the
bill calls for federal guidance standards and mentioned 650
square-foot signs in Orlando. Co-chair Pearce reminded Mr.
Brownfield of the 18" by 90" measurement set out in the
bill. Co-chair Sharp had a concern the signs may be too
small and didn't think they would blight the countryside.
He considered it a public service.
Senator Green elaborated that the Federal Highway
Administration language in SB 56 had to do with the fact
that they had become the scapegoat for the reason this
legislation couldn't be done in Alaska. The FHA commented
favorably on the acceptability of the bill in committee last
year.
Senator Parnell asked the purpose of statutory or regulatory
permitting fees. Mr. Brownfield explained that fees have
been routinely collected as the cost of doing business, but
there was no public process to establish fees.
End Side 1 (000-590), Begin Side 2 (590-000)
Mr. Brownfield continued that it was a regulatory matter
that needed correction. He confirmed Senator Parnell's next
comment that the department currently charges fees for signs
in the right-of-way and there is no authorization for signs
to be put outside of the right-of-way. Mr. Kito interjected
that he didn't think they would have the authority to charge
a fee for erecting or maintaining a sign on private
property, but through the regulations may charge an
application fee. They would not have the authority to
charge a yearly permit fee for signs on private property.
Senator Donley MOVED for passage of SB 56 with the previous
fiscal note. Co-chair Pearce objected for the purpose of
two questions. One had to do with whether there had been
any public opposition to the bill in the previous committee.
Senator Green replied there had only been support. The
other question concerned the fiscal note. She agreed on the
need for a technical engineer to spend a month to review,
administer, write regulations, but didn't see the need in
following years.
Mr. Kito explained that the figure of $11.5 was related to
the costs of administering a sign program outside of state
right-of-way rather than the regulation paperwork in later
years. He was unsure that costs could be adequately
recovered through application fees without making them
onerous for those outside of the right-of-way. Co-chair
Pearce asked about the process for businesses to erect signs
on private land. She found it objectional that the
department suggested they might have to set fees onerously
high without the additional $11.5 per year in the fiscal
note.
Mr. Brownfield further explained the administrative and
personnel costs. He noted that the primary job of personnel
used for sign enforcement was for right-of-way business.
Sign enforcement takes them away from other business related
to capital highway projects. He noted the current permit
fee of $300 is less than the actual cost of administering
the sign program.
Senator Parnell suggested there would be added enforcement
but questioned the need for a permit process for signs on
private property, inferring there would then be no
administrative costs, only enforcement costs. Co-chair
Pearce agreed that the only costs should be for enforcement
and the violation process, noting that there would likely be
adequate self-policing among the private sector. Mr.
Brownfield clarified that there was an enforcement zone
within 660 feet of the right-of-way, even on private
property and that it was a FHA regulation.
Senator Donley directed attention to his motion pending
before the committee. Co-chair Pearce asked for further
objection to the MOTION to report SB 56 from committee.
There being none, SB 56 was REPORTED OUT of committee with
individual recommendations and a $21.5 fiscal note from
Department of Transportation and Public Facilities. Co-
chair Pearce directed Senator Torgerson (DOTPF subcommittee
Chair) to look carefully at the department's signage budget.
SENATE BILL NO. 1
"An Act relating to living and working conditions of
prisoners in correctional facilities operated by the state,
and authorizing the commissioner of corrections to negotiate
with providers of detention and confinement services under
contract to apply those conditions and limitations on
services to persons held under authority of state law at
facilities operated under contract or agreement; relating to
services provided to prisoners; amending the definition of
'severely medically disabled' applicable to prisoners
seeking special medical parole; amending provisions of the
correctional industries program; and extending the
termination date of the Correctional Industries Commission
and the program."
Co-chair Pearce brought the bill before committee, noted
there were amendments, and invited Senator Donley to address
the committee.
SENATOR DONLEY, sponsor of SB 1, reminded the committee that
this legislation passed both houses last year and was within
a few minutes from being finalized. It follows up on the
constitutional amendment adopted in 1994 regarding victims'
rights and principles for administration of prisons. The
amendment added additional factors for dealing with the
prison system in Alaska: community condemnation for the
offender, restitution for victims and victims' rights,
making a total of five principles.
1) SB 1 protects the public safety provision by
banning participation in martial arts.
2) It enhances rehabilitation by increasing vocational
training.
3) It fulfills the mandate for community condemnation
by limiting luxuries including VCR's and computers in
prisoners' living space, premium cable TV, possession of
pornographic materials and cassette tape players. He noted
particular problems with cassettes being a source of
contraband concealment and the mechanisms being used for
other purposes. Compact disc players would be allowed.
4) A cost saving provision institutes a fee for use of
electrical utilities, not more than $2 per month.
Additional costs such as health care services can be
significantly reduced by the ability to parole wheelchair-
laden or terminally ill prisoners that present no future
danger to the public. Medical bills for those individuals
tend to be very high.
5) The most controversial section of the bill relates
to TV in private cells. An incentive program has been
created for prisoners to comply with court orders to
continue their education and comply with restitution. Those
in minimal or medium security facilities that met the
standards would be allowed to have a TV in their cell. It
was a powerful inducement and motivator. Basic cable would
be allowed, but premium cable was not consistent with the
principle of community condemnation when the vast majority
of Alaskans cannot afford it themselves.
Senator Donley summarized his remarks by pointing to key
revisions. One allows the department two years to implement
the changes, which also gives the inmates notice. Another
bans only free weights, a national movement in prisons.
Another revision calls for a total ban on smoking. He noted
that Texas adopted a similar policy in 1994 and experienced
no significant problems. A smoking ban was appropriate
since the state is responsible for prisoners' health care.
Frank Sauser, Director, Division of Institutions, Department
of Corrections; responded to a query by Senator Phillips on
the reason for allowing premium cable TV in certain
facilities by explaining that it was an incentive for good
behavior. Although he was personally against premium TV for
prisoners, there was no statewide policy and it was a
facility director's decision. The rationale for TV in cells
was that there were not enough programs and jobs to go
around and if "guys wanted to spend the next 99 years
staying in their cell not aggravating people" that was okay.
Senator Adams reiterated that premium TV was a management
tool to reward prisoners for their good time.
Senator Phillips asked about exercise equipment at
facilities. Mr. Sauser described some of the various
machines and confirmed that no one was being denied the
right to use the equipment.
Co-chair Pearce asked for further questions. There being
none, she requested Senator Donley to launch into the
amendments.
Senator Donley informed the committee that Amendment #1 was
requested by the Department of Law. The bill provides that
officials have the ability to view into living quarters.
The concern to the department was over existing facilities
with doors lacking that capability. The amendment would
allow an exemption if the department acquired a built
facility.
Senator Donley MOVED Amendment #1, Senator Adams objected
for the purpose of seeking the department's recommendation.
Mr. Sauser verified the department's support of the
amendment. Senator Adams then withdrew his objection.
Without further objection, Amendment #1 was ADOPTED.
Amendment #2 was not offered.
Senator Donley brought up Amendment #3. He referred to
discussion during the Department of Corrections budget
overview (1-22-97, Tape SFC-97 #9) regarding the level of
state participation in medical treatment of prisoners being
tied to statutory requirement. He explained Amendment #3
would remove the statutory references to the existing
standard so that the constitutional standard established by
the court would be the guideline. It would allow greater
flexibility to the state to save money if the constitutional
standard changed. Senator Donley was unsure of the
department's position. Senator Donley MOVED Amendment #3.
Senator Adams objected.
Mr. Sauser indicated the amendment was new to him and he was
not prepared to speak to it.
DEAN GUANELI, Chief Assistant Attorney General, Criminal
Division, Department of Law, spoke in opposition to the
amendment. He thought it was a mistake because it makes no
substantive change in the current obligation of the
department. Ninety percent [of the statutory language] is
from a constitutional standard set by the Alaska Supreme
Court in a 1978 opinion that was incorporated into the
statutes. The amendment would not change the department's
obligation, nor would it significantly affect costs. Having
language in statute makes it easier for the department to
deal with medical care providers because care can be limited
to serious medical needs if it is clearly set out in
statute. The present standard is a good one. The
department gets more complaints about lack of medical
treatment than anything else. Many prisoners feel they are
not getting adequate treatment because the department is
trying to limit medical costs and cut corners based on the
legislature's direction. Mr. Guaneli summarized, stating
"we're probably better off leaving the statute work the way
it is."
Senator Donley withdrew Amendment #3. Co-chair Pearce noted
there was no objection to withdrawing the amendment.
Senator Adams MOVED Amendment #4. Senator Phillips
objected. Senator Adams explained the amendment in two
parts. The first deletes a portion of the bill he deemed
unnecessary. He questioned having the department monitor
the food expenses of the Army when the information was
available on an annual basis from Budget and Audit. He said
the second part relates to fees for utilities, noting that
it could bring in $20,000, yet there is authorization for
people to work 600 hours of overtime, so it is a wash. He
questioned whether creating more work for corrections was
what was needed and suggested the $20,000 be paid to victims
or court fines. He also noted prisoners could get around
the fee by getting a classification on their mental state.
Senator Phillips requested the department's position and
whether there was additional administrative burden related
to the provisions in Section 5. Mr. Sauser said it created
some burden in that the department calculates food costs
differently than the Army and it would have to be monitored
and altered accordingly to coincide.
Senator Donley explained that the Army costs are easy to get
and was a good established standard of what it costs to feed
large groups in Alaska. The percentage was reasonable and
there was also a desire to create an upper level to the cost
of meals in prisons.
Senator Parnell asked what fees were being collected by the
department currently.
End SFC-97 # 30, Side 2 (590-000)
Begin SFC-97 #, Side 1 (000)
Mr. Sauser replied that the department passes on as much of
the costs as possible, described some costs that were
reimbursable and mentioned the exception for prisoners who
are legally indigent.
Co-chair Pearce asked for further discussion on Amendment
FAILED by a tally of 1 to 6.
Co-chair Pearce asked for the amount of a judgement against
the state relating to the mail bombing case. Mr. Guaneli
recollected the state's portion was around $1.2 million.
Co-chair Pearce expressed surprise that even after that case
there was no monitoring of phone calls in state correctional
facilities. She then referred to the Cleary decision
regarding free phone calls, noted the department's claim
that it would cost about $750,000 to install monitoring
equipment, and asked if the administration expected to
propose some plan to monitor phone calls.
Mr. Sauser specified there was monitoring capability at the
Spring Creek facility and all prisoner calls are recorded
there. He further stated they had been working a number of
years for a contractual arrangement for a system-wide phone
monitoring system that would be no cost to the state.
Co-chair Pearce asked what monitoring meant to the
department and if someone listens to the calls to make sure
no one is talking about bombs. Mr. Sauser answered
negatively. He explained that individual lines can be
monitored, but more frequently someone listens to the
recording because up to twenty different phones can be
accessed during the day and it would take that many staff
members to monitor each line. There was additional
discussion and explanation by Mr. Guaneli about the Cleary
case regarding free phone calls and a statewide prison phone
monitoring system.
Senator Adams commented on a previous fiscal note to the
bill. Co-chair Pearce explained that the Judiciary
Committee substitute dropped the portion of the bill that
carried the fiscal note. She indicated her interest in
pursuing the phone call situation, but didn't want to hold
up the bill. She asked Senator Donley to continue to work
toward finding a solution that may be added later to the
bill. He responded affirmatively and pointed out the
previous fiscal note related to the original version of bill
which mandated phone monitoring.
Co-chair Sharp MOVED for adoption of CSSB 1(FIN). Senator
Adams objected. He stated that instead of the bill getting
tough on prisoners it actually gets tough on management and
could be a riot initiative because it upsets prisoners'
rights. On a vote of 6 to 1, CSSB 1(FIN) was REPORTED OUT
of committee with individual recommendations accompanied by
zero fiscal notes from Department of Public Safety and
Department of Law and a $20.0 fiscal note from Department of
Corrections.
There was no additional business before the committee. Co-
chair Pearce reminded the members of upcoming subcommittee
and committee schedules.
ADJOURNMENT
The meeting was adjourned at approximately 11:00 A.M.
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