Legislature(1997 - 1998)

04/03/1997 09:10 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                             MINUTES                                           
                    SENATE FINANCE COMMITTEE                                   
                          April 3, 1997                                        
                            9:10 A.M.                                          
                                                                               
                                                                               
  TAPES                                                                        
                                                                               
  SFC-97, # 74, Sides 1 & 2 (000-589, 589-143)                                 
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Senator  Bert  Sharp,  Cochair,  Senate  Finance  Committee,                 
  convened the meeting at approximately 9:10 A.M.                              
                                                                               
  PRESENT                                                                      
                                                                               
  In  addition  to  COCHAIR  SHARP,  COCHAIR  PEARCE, SENATORS                 
  PHILLIPS, TORGERSON, PARNELL and ADAMS were present when the                 
  meeting was convened.  SENATOR DONLEY arrived as the meeting                 
  was in progress.                                                             
                                                                               
  Also Attending:                                                              
  CHRIS  CHRISTENSEN, General  Counsel, Judicial  Branch; NICO                 
  BUS, Chief of Financial Services, Support Services Division,                 
  Department of  Natural Resources  (DNR); JOAN  BROWN, Fiscal                 
  Analyst,  Office  of  Management  and  Budget  (OMB);  TRACI                 
  CRAMER,  Administrative  Officer,  Exxon  Valdez  Oil  Spill                 
  Trustee Council; ANNALEE MCCONNELL,  Director, OMB;   fiscal                 
  analysts and aides to committee members.                                     
                                                                               
  Also Attending Via Teleconference:                                           
  TERI CARNS, Senior Staff Associate to Judicial Council; MILT                 
  WILTSE,  Director,  Division of  Geological  and Geophysical                 
  Surveys,  DNR; KEN BOYD, Director, Division  of Oil and Gas,                 
  DNR.                                                                         
                                                                               
  SUMMARY INFORMATION                                                          
                                                                               
       HB 58  CIVIL ACTIONS/ATTY FEES/INSURANCE                                
                                                                               
       Testimony was heard  regarding fiscal notes from  CHRIS                 
       CHRISTENSEN  and  TERI CARNS.   The  bill was  HELD for                 
       further consideration.                                                  
                                                                               
                                                                               
       SB 107 APPROPRIATIONS: CAPITAL & FUNDS                                  
                                                                               
       Testimony was heard  on capital  project requests  from                 
       representatives of  the Court System and the Department                 
       of Natural  Resources.  The  bill was HELD  for further                 
       consideration.                                                          
                                                                               
                                                                               
  CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 58(FIN) am                      
  "An Act relating  to civil actions; relating  to independent                 
  counsel  provided under  an  insurance  policy; relating  to                 
  attorney fees;  amending Rules 16.1,  41, 49, 58,  68, 72.1,                 
  82, and 95, Alaska  Rules of Civil Procedure;  amending Rule                 
  702, Alaska Rules of Evidence; and amending Rule 511, Alaska                 
  Rules of Appellate Procedure."                                               
                                                                               
  CHRIS CHRISTENSEN, General Counsel, Judicial Branch,  stated                 
  that  their  fiscal  note was  low  considering  the massive                 
  number of changes the  bill proposes.    He  noted that most                 
  parts of tort reform  didn't help the state save  money, but                 
  did  help  litigants.   The  fiscal  impact of  most  of the                 
  changes would be  either neutral  or impossible to  predict.                 
  There  would  be  a slight  impact  on  the  way cases  were                 
  handled.   For  example, the  defendant  has the  option  of                 
  making  periodic  payments  for amounts  in  excess  of $100                 
  thousand.  Extra judicial time would be involved in that the                 
  judgement would have to set up the payment schedule and take                 
  testimony  from witnesses,  and resolve  future  disputes if                 
  payments  were not  being  made.    Section  15  relates  to                 
  collateral benefits and requires the  jury to consider them,                 
  rather than the  judge under  current law,  which would  add                 
  jury expenses.    Section  23  modifies the  rate  at  which                 
  prejudgment  interest is accrued by changing it from a fixed                 
  rate to a floating  rate.  This would require a  new rate to                 
  be  set yearly,  necessitating  new  computer  software  and                 
  additional clerical  time.   Continuing,    MR.  CHRISTENSEN                 
  testified  that there  would be an  increase in  the medical                 
  malpractice 3-person  expert advisory panels  because of the                 
  inclusion   of   malpractice   claims   against   government                 
  attorneys,  but  the  cost would  be  minimal,  and was  not                 
  included in the fiscal  note.  Some judicial costs  would be                 
  saved regarding  motion practices,  but would  be offset  by                 
  longer trials and  increased appeals.  It has been estimated                 
  that the bill would result  in increased litigation for five                 
  to  seven  years until  all  the  issues were  settled.   In                 
  response to a  question from SENATOR ADAMS,  MR. CHRISTENSEN                 
  responded that the fiscal note he was referring to was dated                 
  3-11-97 for $19.4 thousand.                                                  
                                                                               
  SENATOR  ADAMS commented that one of  the stated reasons for                 
  tort  reform was because  the court system  was clogged, yet                 
  their fiscal  note was low.   Based on that,  he doubted the                 
  truth of that reasoning and believed  the bill should not be                 
  before  the legislature.   He questioned the  number of tort                 
  cases.  MR. CHRISTENSEN stated that  torts were a very small                 
  percentage of total cases before the courts, excluding small                 
  claims.  There  were less than  1,500 tort cases last  year,                 
  out  of  approximately 140  thousand  total cases.   SENATOR                 
  ADAMS questioned the argument that  most civil lawsuits were                 
  frivolous.   He referred  to the court  system's 1995 annual                 
                                                                               
                                                                               
  report  indicating  that   most  cases  have  merit.     MR.                 
  CHRISTENSEN confirmed that the percentage of  lawsuits which                 
  are dismissed or fined  as frivolous was very tiny,  but did                 
  not  have  exact figures.    SENATOR ADAMS  cited additional                 
  statistics regarding  tort cases,  making the  argument that                 
  the bill was not needed.   He reiterated that because of the                 
  small fiscal note the bill did not do anything.                              
                                                                               
  TERI CARNS,  Senior  Staff Associate  to  Judicial  Council,                 
  testified  via teleconference  from  Anchorage.   She  spoke                 
  about  the  Judicial  Council fiscal  note  that  covers two                 
  areas.  One  was an  alternative dispute resolution  program                 
  review at a cost of approximately $8,000 for a contractee to                 
  do that work.   The other was  a review of settlement  data.                 
  It would provide  an opportunity  to have confidential  data                 
  available for analysis to the  Judicial Council, which would                 
  then be  reported periodically  to the  legislature and  the                 
  court at a cost of approximately $18 thousand.                               
                                                                               
  COCHAIR SHARP noted there were  no additional questions.  He                 
  stated the bill would be HELD for further consideration.                     
                                                                               
  SENATE BILL NO. 107                                                          
  "An Act making and amending capital and other appropriations                 
  and  to  capitalize funds;  and  providing for  an effective                 
  date."                                                                       
                                                                               
  CHRIS   CHRISTENSEN,   General  Counsel,   Judicial  Branch,                 
  referred  to their first  priority project on  page 29, line                 
  22: a request of $1.375 million  to begin the replacement of                 
  the court systems recording equipment.  He noted that Alaska                 
  was the  only state  that did  not use  court stenographers.                 
  All court  cases were  electronically recorded.   Last  year                 
  they produced about 52 thousand cassette tapes.  From those,                 
  over 110  thousand pages  of transcript were  prepared.   If                 
  stenographers  were used, they would  need at least fifty at                 
  range  17 or 18, based on outside  salaries, so it saves the                 
  state  approximately  $3  million  in  salaries  every year.                 
  However, every  fifteen years the recording  equipment needs                 
  replacement.  The appropriation would replace the peripheral                 
  equipment that supports the recording,  such as microphones,                 
  mixers  and  amplifiers.   The  recording machines  would be                 
  purchased next year.   They plan  to go to PC-based  digital                 
  system that would provide better  quality recordings.  There                 
  was  additional  discussion  about  equipment  based  on  an                 
  inquiry by SENATOR PHILLIPS.                                                 
                                                                               
  MR. CHRISTENSEN brought  up the second priority,  that being                 
  $580  thousand  to  continue  code  upgrades  for  the  1974                 
  Anchorage courthouse  which  houses the  supreme court,  the                 
  court of appeals,  the public  law library,  the family  law                 
  courts,  the   domestic  violence  courts   and  the   night                 
  magistrate.    A  1993  condition  inventory showed  over  a                 
                                                                               
                                                                               
  hundred code violations  and they  received a closure  order                 
  from  the  fire  marshall.     The  appropriation  would  be                 
  primarily used for fire  protection, accessibility under the                 
  Americans with Disabilities Act,  seismic resistance, energy                 
  conservation and indoor air quality.                                         
                                                                               
  The   third   priority  was   deferred  maintenance.     MR.                 
  CHRISTENSEN acknowledged the legislature  planned to take  a                 
  different approach to  deferred maintenance,  so he did  not                 
  elaborate on the request and concluded his testimony.                        
                                                                               
  NICO  BUS, Chief  of  Financial  Services, Support  Services                 
  Division,  Department  of Natural  Resources,  presented the                 
  department's capital projects  requests.   The first was  on                 
  page 16, line 8, that being  $300 thousand for conversion of                 
  manual plats to digital format so it would be electronically                 
  accessible.     The  request   would  enable   420  township                 
  conversions within  an ongoing  six year  project which  was                 
  nearing completion.                                                          
                                                                               
  SENATOR  DONLEY requested  identification  of the  corporate                 
  receipt sources.   MR. BUS responded that  the first project                 
  was funded from AIDEA receipts.                                              
                                                                               
  The next project on  line 10 was $400 thousand  to delineate                 
  potential coalbed  methane  drilling  targets  to  encourage                 
  private  sector exploration and development in meeting rural                 
  energy  needs.   It would  provide for  permits  for seismic                 
  testing and surveys, limited  drilling, data collection  and                 
  processing, and reporting.  In  response to a question  from                 
  COCHAIR SHARP, he stated last  year's appropriation was $400                 
  thousand.  The funds were from AIDEA.                                        
                                                                               
  MILT   WILTSE,   Director,   Division   of  Geological   and                 
  Geophysical  Surveys,  DNR,  testified  on the  project  via                 
  teleconference from Fairbanks.  He  explained that the funds                 
  last year were  to start building  an exploration model  for                 
  coalbed methane, a new endeavor which was being conducted in                 
  conjunction  with  the Texas  Bureau  of Mines  on contract.                 
  There was additional discussion about the expenditure of the                 
  previous year's appropriation.                                               
                                                                               
  MR. BUS continued with the next project  on line 11.  It was                 
  $200 thousand for parks emergency  repairs, a minimal amount                 
  considering   over  $10   million  of   repairs  have   been                 
  identified.  This  appropriation would  focus on health  and                 
  safety issues such as outhouse and roof repairs in the areas                 
  of Kodiak, southeast Chugach, Kenai, Mat-Su and the northern                 
  region.    SENATOR  PHILLIPS  expressed  surprise  that  the                 
  governor was requesting such a  small amount considering the                 
  importance of parks and campgrounds to tourism.  He inquired                 
  about the thought process  behind the minimal request.   MR.                 
  BUS responded that it was basically a prioritization process                 
  among  many  needs and  the request  was  close to  what was                 
                                                                               
                                                                               
  appropriated  last  year.   SENATOR  PHILLIPS  requested the                 
  original  list  of  requests  submitted  to  the  governor's                 
  office.                                                                      
                                                                               
  SENATOR DONLEY noted  the funding  request was from  general                 
  funds  and thought  it  would be  justifiable  to use  AIDEA                 
  receipts  because  tourism  was  an   economic  issue.    He                 
  requested a response from OMB.                                               
                                                                               
  JOAN BROWN, Fiscal Analyst, Office of Management and Budget,                 
  explained that decisions  about which projects to  use AIDEA                 
  receipts  for  were  based  on  whether they  were  economic                 
  development   projects  and   the  amount  of   AIDEA  funds                 
  available.  Parks were funded with general fund money.                       
                                                                               
  In response to a  question from COCHAIR SHARP  about program                 
  receipts,  MR.  BUS explained  that  the revenue  from parks                 
  facilities exceeded the  state budget  by $100 thousand,  so                 
  the administration allocated that amount of program receipts                 
  to the general fund.                                                         
                                                                               
  The next item was reforestation on line 12.  According to AS                 
  41.17.060,  the  state  can  deposit  25 percent  of  timber                 
  revenues into the timber reforestation  fund.  $100 thousand                 
  of  AIDEA  funds would  reforest 400  acres in  interior and                 
  southcentral Alaska,  specifically in the Tanana  valley and                 
  Kenai.                                                                       
                                                                               
  Line  13,   Airborne  Geophysical  and   Geological  Mineral                 
  Inventory  for $400 thousand,  was the next  project.  These                 
  projects have been successful in the past in attracting  the                 
  mineral industry to areas with potential.   Line 15, Oil and                 
  Gas Areawide Lease Database for $270 thousand, would include                 
  all new tract releases, previous tract leases and mapping so                 
  that the  industry and  the department  had the  information                 
  readily available to speed  up the process.  The  funds were                 
  from AIDEA.                                                                  
                                                                               
  End SFC-97, #74, Side 1, Begin Side 2                                        
                                                                               
  MR. BUS continued with the next DNR project on line  16, the                 
  National  Petroleum  Reserve   Technical  Studies  for  $400                 
  thousand.  The  project from  AIDEA funds  seeks to  promote                 
  renewed  exploration activity in  the reserve  by supporting                 
  geological  and geophysical studies  in key areas.   Much of                 
  the work would be contracted out to private sector.                          
                                                                               
  MR.  WILTSE offered  additional information on  the project,                 
  noting the program  was designed to  get at subsurface  data                 
  for new models for the NPRA area.                                            
                                                                               
  KEN BOYD, Director, Division of Oil  and Gas, DNR, testified                 
  via  teleconference on  the  previous project  regarding the                 
  areawide  leasing  database.   He  indicated  that  areawide                 
                                                                               
                                                                               
  leasing had implications for the future  of the state and it                 
  was important to have adequate  maps indicating what was for                 
  lease, what had  been leased and  what the status of  leases                 
  were.  In response to a  question from SENATOR TORGERSON, he                 
  explained that the current database was small and used on an                 
  ad hoc  basis.   With areawide  leasing, the  database would                 
  have  to  be  completed, modernized  and  maintained.   They                 
  wanted  to produce  their  own maps  in  house, showing  the                 
  changing  land  status.    The  project would  provide  that                 
  capability.  SENATOR  TORGERSON asked if the amount of money                 
  would be all  that was needed to complete the  project.  MR.                 
  BOYD confirmed.                                                              
                                                                               
                                                                               
  MR. BUS brought up the  next request on line 18,  that being                 
  the Oil and Gas Electronic Interface  with Industry for $150                 
  thousand.  It would  get the department and the  industry on                 
  the  same line regarding data transfers with the purchase of                 
  software.  It would streamline and  speed up the transfer of                 
  data between the different  groups.  It was a  one-time item                 
  from AIDEA funds.                                                            
                                                                               
  The  next  item, line  20, was  the use  of AIDEA  funds for                 
  streamgaging in different rivers to  determine the volume of                 
  water available for  development projects.  The  project was                 
  matched with federal funds from the USGS.                                    
                                                                               
  Lines 21 and 22,  Value Added Timber Sale for  $230 thousand                 
  and  $75  thousand  respectively, would  deal  with  the Tok                 
  Delta, Kantishna, Wrangell and Ketchikan areas.  It was from                 
  AIDEA funds.                                                                 
                                                                               
  The next  project was  on line  23 for  Mount McKinley  Meat                 
  Plant  Renovations  and  Repairs  in   the  amount  of  $100                 
  thousand, coming from AIDEA funds.  The roof and boiler were                 
  in desperate need of repairs.                                                
                                                                               
  MR. BUS  noted the next  three projects were  federal grants                 
  passed  through  to  organizations  that  wanted  to develop                 
  projects.    The  grants  were  awarded to  non-profits  and                 
  municipalities  for  four  categories.  The  state  acts  as                 
  custodian  of the  grants.   The recipient  of the  National                 
  Historic  Preservation  grants  went  predominantly  to  the                 
  Alaska   Historical   Preservation   Organization   in   the                 
  department.                                                                  
                                                                               
  The Recorder's Office Information and Imaging System on page                 
  17, line 4,  was a new  project to streamline an  antiquated                 
  process.    It would  automate  the process  through imaging                 
  technology used in other  states.  It was considered  urgent                 
  and would allow the recorder to gain efficiency with a turn-                 
  key system.   It was felt  the investment would return  many                 
  times over by speeding up the process.                                       
                                                                               
                                                                               
  Line 6, the  Old Eagle School  Site School Clean-Up for  $65                 
  thousand,  was  for clean-up  of  soil contamination  on the                 
  state-owned land.  There had been a  supplemental request of                 
  $100 thousand for removal of the  buildings.  In response to                 
  a question from COCHAIR  PEARCE, MR. BUS explained that  the                 
  village  of Eagle  sued  the state  for  abandonment of  the                 
  buildings which were a  health and safety issue.   The state                 
  would like to transfer the property  to Eagle.  The building                 
  was received in  1967 from either the  BLM or the BIA.   The                 
  state tried to  get the feds to  carry some of  the clean-up                 
  expense but was  unsuccessful because of the  length of time                 
  involved.    COCHAIR  PEARCE questioned  why  the  state was                 
  giving  the  land away.   MR.  BUS  was uncertain  but would                 
  follow up on the inquiry.                                                    
                                                                               
  The next item was  $15 million out of the Oil Spill Response                 
  Fund for  the Exxon Valdez  Oil Spill Trustee  Council Small                 
  Parcel Acquisitions on line 7.                                               
  TRACI CRAMER, Administrative Officer, Exxon Valdez Oil Spill                 
  Trustee Council (EVOS), testified that the money would allow                 
  the agency to have authority  to purchase parcels that  were                 
  affected  by the  oil  spill.   She  stated  that  it was  a                 
  vigorous  public process  and explained.   In response  to a                 
  question  from SENATOR  TORGERSON, she  clarified that  they                 
  currently  come  back to  the  Legislative Budget  and Audit                 
  Committee  for   purchase  authority,   but  the   committee                 
  requested  they reduce the number of RPL's, so their attempt                 
  to do that  was to put  it in the  capital budget.   SENATOR                 
  TORGERSON felt  it was  important to  keep the  oversight of                 
  parcel by parcel approval.                                                   
                                                                               
  SENATOR PHILLIPS wanted to  know the net effect if  the item                 
  was deleted.  MS. CRAMER explained  there would be no impact                 
  if the committee  was willing to  consider parcel by  parcel                 
  requests.   She added that  the difficulty of  going through                 
  the capital process  was a matter of timing.   If they don't                 
  have the  authority in  the budget,  they must wait  another                 
  year  to  get additional  authority.   There  was additional                 
  discussion on this issue.                                                    
                                                                               
                                                                               
  ANNALEE MCCONNELL, Director,  OMB, reiterated that they  had                 
  been explicitly asked  last year not to have this be part of                 
  the LBA process, but instead included in the capital budget.                 
  She  requested that if the legislature's desire was to leave                 
  it in  the LBA process,  it be clearly  stated so  that they                 
  don't have the timing problem.                                               
                                                                               
  COCHAIR PEARCE stated  her position  that the EVOS  trustees                 
  should come  back to the legislature like everyone else does                 
  for their purchases.                                                         
                                                                               
  COCHAIR SHARP  requested that assigned  values and  purchase                 
  prices of  the  three projects  listed  be provided  to  the                 
                                                                               
                                                                               
  committee.  COCHAIR PEARCE stated  her philosophy that state                 
  ownership of what  was now private land  was not necessarily                 
  the best use  for the  Exxon settlement because  it did  not                 
  help restore benefit to the people of Prince William Sound.                  
                                                                               
  MR. BUS  brought up the next  project on line 9,  that being                 
  the  Fairbanks  Building Repairs  and  Maintenance  for $100                 
  thousand.   It would provide  for asbestos  removal and  fix                 
  electrical problems that pose dangers to the employees.                      
                                                                               
  The next item was Wildland Fires Urban Interface Support for                 
  $100 thousand on line 10.  It would allow purchase of excess                 
  equipment from  the  federal  government  for  various  fire                 
  departments, provide  training, buy  compressed air  systems                 
  and  remote automated  weather stations.    SENATOR PHILLIPS                 
  inquired if there was duplication of                                         
  anything  the Department  of  Military  and Veteran  Affairs                 
  (DMVA) was doing.  MR. BUS responded that the purchases were                 
  strictly for fire  related activities and he did not believe                 
  there was duplication.                                                       
  Line 11, Fire  Communications Equipment  for $350  thousand,                 
  was similar  to the request in  the DMVA.  It  would improve                 
  communications to comply with federal mandates.                              
                                                                               
  MR. BUS concluded his presentation with  the request on line                 
  13  for Fire  Equipment  Replacement in  the amount  of $100                 
  thousand from  the general  fund for  fire detection  units,                 
  chain saws and pumps.                                                        
                                                                               
  In  response  to  an  earlier   inquiry  by  SENATOR  DONLEY                 
  regarding  the  use  of  AIDEA   funds  for  parks,  ANNALEE                 
  MCCONNELL explained  they limited recommendations  for AIDEA                 
  projects  to  the  $16  million declared  by  the  board  of                 
  directors under the statutes  passed last year.   There were                 
  other projects important for economic development, including                 
  parks, but they did  not want to exceed the  dividend amount                 
  declared by  the board.   In  response to SENATOR  PHILLIPS'                 
  earlier question regarding the small  request for parks, she                 
  noted  $150  thousand was  appropriated  last year,  so this                 
  request was more than last year.   Additionally, there was a                 
  supplemental request for severe emergency situations,  which                 
  added  up to a total  request of $400  thousand for the next                 
  year.                                                                        
                                                                               
  RECESS                                                                       
                                                                               
  COCHAIR  SHARP recessed  the meeting at  approximately 10:37                 
  A.M.,  then  reconvened,  taking  up   SB  83  (Supplemental                 
  Appropriations).  Minutes for SB 83 on file.                                 

Document Name Date/Time Subjects