Legislature(1997 - 1998)
04/20/1998 04:45 PM Senate FIN
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* first hearing in first committee of referral
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MINUTES SENATE FINANCE COMMITTEE 20 April, 1998 4:45 p.m. TAPES SFC 98 # 131, Side A (000-592) Side B (592-500) Side B (593-174) CALL TO ORDER Senator Drue Pearce, Co-Chair, convened the meeting at approximately 4:45 p.m. PRESENT In addition to Co-Chair Pearce, Senators Sharp, Donley, Adams, Parnell and Phillips were present when the meeting was convened. Senator Torgerson arrived shortly thereafter. Also Attending: Representative CON BUNDE; WENDY REDMOND, Vice President, University Relations, University of Alaska; BARBARA RITCHIE, Deputy Attorney General, Department of Law; SHARON BARTON, Director, Division of Administrative Services, Department of Administration; JUANITA HENSLEY, Director, Division of Motor Vehicles, DOA; BARBARA MIKLOS, Director, Division of Child Support Enforcement; MARTHA MOORE, Research Analyst, Department of Health and Social Services; DIANE BARRANS, Executive Director, Postsecondary Education Commission, Department of Education; GEORGE SMITH, Deputy Director, Division of Libraries, Archives and Museums, DOE; SUZANNE TRICK, University of Washington; JOHN GEORGE, National Association of Independent Insurers; MIKE GREANY, Director, Division of Legislative Finance and aides to committee members and other members of the Legislature. SUMMARY INFORMATION SENATE BILL NO. 229 "An Act making appropriations for the operating and loan program expenses of state government, for certain programs, and to capitalize funds; making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date." SENATE BILL NO. 230 "An Act making appropriations for the operating and capital expenses of the state's integrated comprehensive mental health program; and providing for an effective date." The committee began the meeting by hearing a subcommittee closeout report for the ALASKA COURT SYSTEM. Senator Parnell chaired the subcommittee and gave the presentation. He stated that the subcommittee recommended funding the ACS at the same level as in FY98. Under the subcommittee proposal, the agency would be allowed to retain $690,000 in deferred savings to use on their priority items for FY98. The proposal also funded an increment requested by the Alaska Judicial Council for an alternative dispute resolution project. Senator Adams served on the subcommittee and could comment on the report, offered Senator Parnell. Senator Parnell offered a motion to incorporate the Alaska Court System subcommittee report into the working document for the operating budget. There was no objection and Co- Chair Pearce so ordered. Senator Sharp next gave a presentation for the DEPARTMENT OF FISH AND GAME subcommittee. He told the committee the subcommittee recommended denial of a total of $146,000 general funds transfers in for the Division of Information Services costs. Also recommended, was denial of some fund source changes from employee housing receipts to statutory designated receipts. This would restore approximately $108,500 general fund program receipts. The ADF&G subcommittee proposal substituted the Board of Fisheries and Game component. It substituted $84,400 Fish and Game funds for general funds. Under the Advisory Committee component, the proposal deleted $40,000 transferred from the Board of Fisheries and Game. The funding level was maintained for the Office of the Commissioner in a separate BRU similar to the last year's budget. The proposal reduced the total by $120,200 general funds, and directed the department to reassign the duties of the deputy commissioner to division directors. The overall Commissioner's Office funding was increased by $5,100 due to funding sources other than general fund. The subcommittee recommended adding legislative intent language to the bill to clearly state which positions would be funded under the Personnel Services component. The Division of Subsistence was denied $150,000 general funds requested to use for a Community Use Survey. The subcommittee deleted $42,400 general funds as a general reduction. The $75,000 general fund and $125,000 Fish and Game fund increment was denied to the Division of Habitat by the subcommittee. Also denied to the division was $175,000 general fund and $125,000 Fish and Game increments for Habitat Permitting Title 16. Those were the total reductions recommended by the ADF&G subcommittee to reach the goal of a $400,000 general fund reduction. Senator Sharp then moved to incorporate the ADF&G subcommittee closeout report into the working document for the operating budget. Senator Adams objected stating that the Legislative Minority was at odds with the Majority on this issue. Senator Adams spoke to his objection, saying the minority was concerned over cuts made to the Commissioner's Office. He was unsure if there was a personality conflict between the Senate Finance Committee and the person holding the deputy commissioner position, but didn't want to see the position lost. He believed that, as in most states, the Fish and Game funds should be utilized in the Commissioner's Office. His second concern dealt with the proposed cuts to the Division of Subsistence. He pointed out that since 1992, funding for the division had been cut 40 percent. This would affect the field offices throughout the state, he surmised. He brought up HB 406, the Constitutional Amendment relating to Subsistence. Also of concern, were the reductions made to the Division of Habitat permitting under Title 4. The minority felt that the $175,000 general fund reductions would eliminate the increment dealing with the workload cases in Mat-Su, Southeast and the base funding for the Kenai River Center. They took issue with the $125,000 Fish and Game fund cut. They believed that would also affect workload cases. Oil and gas leasing habitat components were of another concern. They felt the loss of funding would hurt economic development. The Tongass Land Management Plan would cause an increase in workload for the division also. Senator Adams continued voicing the concerns of the minority speaking to proposed cuts to the commercial fisheries operations. He spoke of the DIS component and the importance of funding new technology. The headquarters of fisheries management reduction was another area of disagreement. He warned that the division would lose its technical publication program, which he said was important along with technology to keep pace with fisheries. He addressed the Board of Fisheries, Board of Game and Advisory Committee cuts. He stressed the importance of the role of the advisory committees in the regulatory process. Public input was critical, he stated. He talked further about the DIS funding request, saying it had been denied the year before and should be funded in this budget. He spoke of the DIS charge-back and the importance of consistency with other agencies. This concluded Senator Adams statement regarding the ADF&G proposed budget, he maintained his objection and announced he would be presenting amendments to the operating budget. Senator Sharp responded to Senator Adam's comments by emphasizing the positive aspects of the subcommittee's recommendations. The operating budget would increase $6.1 million over last year, representing a six percent overall increase for the department. The total commercial fisheries budget, excluding EVOS restoration projects, increased by $640,000 over FY98. Despite the reductions, the Division of Subsistence budget increased by $635,400. This was through sources for special projects. The subcommittee approved a Fish and Game fund increase of $3.5 million to the department over last year, he concluded. Senator Adams offered representatives of ADF&G to speak to the specifics of the points he raised. He was unsure if this would be the department's last opportunity to be heard. Co-Chair Pearce said it was Senator Adams' option. She noted he was referencing the department's impact statement closely. She said there would be an opportunity for the department to discuss amendments with the committee when they were taken up at Friday's meeting. Senator Adams deferred calling upon representatives until that meeting. Co-Chair Pearce requested a roll call. The ADF&G subcommittee report was incorporated into the working document for the FY99 Operating Budget by a vote of 6-1. Senator Adams cast the nay vote. The committee then heard the subcommittee report for the DEPARTMENT OF LAW. Senator Sharp was the chair of that subcommittee also and gave the presentation. The subcommittee membership was made up of Senators Sharp, Kelly and Ellis. The subcommittee adopted the DOL decrements into their recommendations. They recommended keeping the $250,000 increment for Criminal Child Abuse Response for the Criminal Division. They recommended denial of $50,000 Fish and Game fund increment for a part-time attorney. For the Civil Division, the subcommittee recommended a deduction of $200,000 inter-agency receipts to reconcile with scheduled reimbursable service agreements. Three increments were denied in the Human Services Section under the subcommittee recommendations. The Oil and Gas Litigation would take a big cut, according to Senator Sharp. The subcommittee recommended a reduction of litigation expenses of $658,600 general funds. Two new components were established under the BRU in the proposal. One was Oil and Gas Litigation component and the other was a Legal Services component. The subcommittee recommended making no changes to the Governor's request for all other BRU's. Senator Sharp offered a motion to incorporate the DOL subcommittee report into the working draft for the FY98 Operating Budget. Senator Adams objected and spoke to his objection. The committee did not have the full package on the Smart Start Program and instead piecemealed increments together, according to Senator Adams. Therefore, he objected to the items related to Smart Start. He speculated that child protection would begin to be denied and then widen to denial of several child abuse programs. If 35 new positions were going to be added to the Department of Health and Social Services, tools also needed to be provided to DOL he stressed. He didn't know current caseloads or the impact on child abuse, but he wanted to hear DOL's estimates. He continued speaking to his objection by addressing the Oil and Gas Litigation. He advised that if not funded in the operating budget, it should be funded in the supplemental budget. It was the lowest it had ever been, he stated. He made comments on the part-time attorney position suggesting that funding could be re-appropriated from the Indian Country lawsuit. He requested that a representative from the DOL come to the table to respond to the proposed cuts to the child protection increments. BARBARA RITCHIE, Deputy Attorney General of the Civil Division, spoke as follows: "Just to - our impact statement is in the back of the room and I assume each of you has that in your packet of materials for today. On the impacts of the Senate subcommittee budget proposal." "On the Smart Start it can be a little confusing unless you've been sort of living with this thing like I have been for the last few months. The way - for the Civil Division there were three increments. One is what we call the existing caseload in the Anchorage Human Services Section. The second one is what's called the Impact on Child Abuse Response increment. And the third was an increment for juvenile delinquency efforts; again in Anchorage." "Taking those really one at a time - the first - in which all add up to the full increments add up to $1,280,000. The first increment would be the existing caseload in the Anchorage Human Services. That increment was for $291,000 and would fund two attorney positions in the Anchorage Human Services Section for child abuse and child neglect cases. Our situation right now, the reason for this increment, and we're calling it 'existing' meaning it does nothing to do or it not totally tied to the new social worker package that's being proposed." "We propose this increment because our current caseloads in the Anchorage area, which covers Southcentral Alaska as well as Unalaska, Cordova, Dillingham, Valdez, Glennallen, Kenai and Palmer are the areas covered out of the Anchorage office, is unmanageable at this point. Since August, late in the fall, early fall of 1997, we've seen caseloads increases of some 60 percent with new petitions being filed in child abuse cases." "So right now what's happening is in our Anchorage office, if the intervention level - legal intervention level, meaning, petitions going to court remains constant like it is now, our attorneys will be averaging over 120 cases a piece. Which is existing caseloads without any new social workers being added. It's not manageable. It's resulting in trial postponements and delays and resulting in children remaining in foster homes or non-permanent placements longer than they should. It's not in the best interest of the children and it's crisis control management." "The second increment is the child abuse response increment. This is for $698,000 and is intended to respond to increased caseloads projected as result of new staff at DFYS. This one, of course, the impact depends somewhat on what happens with the funding. But right now, if there area some 35 new social workers or funding for that added for DYFS, and we have no additional attorney staff in the Anchorage office, or anywhere in the state actually, the statewide caseload will skyrocket to 155 cases per attorney." "Under that sort of scenario, we would not be able to respond to any but the most egregious situations to try to get children to safety. As I've already said, the caseload situation with the Anchorage office is already unmanageable and we're seeing that same sort of increases in Fairbanks and Bethel as well." "So that increment is intended to fund five attorney positions and two para-professional positions and two support staff positions. That was 75 percent of the funding needed in FY99 with intent to add for the full funding - the other 25 percent in FY00. And that's staggered staffing parallel the DFYS staffing plan for additional social workers." "The third increment that was being asked about is for juvenile delinquency crime prosecution in Anchorage. Right now what we have in Anchorage is one position that handles the juvenile delinquency cases for in Anchorage and Dillingham and Kenai. And because of budget reductions last year we sought inter-agency funding from Health and Social Services for this position, which was funded in part. We've continued to do the juvenile delinquency work with one attorney position with a caseload that has been increasing - increased 70 percent over the last four fiscal years." "What this increment would do is fund two positions. One would simply replace the inter-agency funding, which was one year only for FY98 and would add a one new position for juvenile crime prosecution in the Anchorage Human Services Section. So both of these are in Anchorage. So that we can continue to do the juvenile crime prosecution and handle it at a more manageable level. The only reason we're able to pull this off right now as is, is that the Anchorage court, unlike the courts in the other areas of the state, does not require - is not requiring an assistant attorney general representation at all of the proceedings. Because they know we can't do it. We go to all the contested proceedings, trials, appeals and probable cause - contested probable cause hearings." "What this means is that probation officers are making charging, negotiation and other sorts of prosecutorial decisions without advice of council. And we are ending up - we can end up easily in situations where cases end up in appeal where we are involved and things had been done differently than perhaps they would have had there been our advice early on." "So those are the three Smart Start Increments in the DOL budget, none of which are included in the subcommittee report before you today." Co-Chair Pearce asked if Senator Adams wanted Ms. Ritchie to speak to the Oil and Gas Litigation components. Senator Adams passed. Co-Chair Pearce requested a roll call. By a vote of 6-1, the DOL subcommittee report was adopted into the working draft for the Senate Finance Committee CS for the FY99 Operating Budget. Senator Adams cast the nay vote. Senator Sharp then gave the report for the DEPARTMENT OF REVENUE subcommittee. Other members of that committee were Senators Adams and Wilkins. According to Senator Sharp, the subcommittee recommendations included acceptance of all increments on Child Support Enforcement Division. He then said the subcommittee denied the increment requested. The subcommittee reduced the PF match to reach the minimum amount required for current levels of federal funding, in other words, the general fund match was reduced by $66,600, which still allowed the total current level of federal funds to be matched. Senator Sharp chose not to speak to the speculations of privatizing child support collection, but said it was discussed thoroughly with the department. For the Alcohol Beverage Control Board, the subcommittee recommended denial of the $76,000 increment. The subcommittee proposal moved Bank Custody and Investment Management Fees for the Permanent Fund Corporation into a new BRU to improve the program accountability and to attempt to track any movement of funds to any other operational areas. Senator Sharp said this was because this was the highest percentage of cost to the Permanent Fund Corporation. The Alaska Housing Finance Corporation portion of the proposal returned the budget structure to the existing three components: operation, rural housing and public housing. This was to help maintain program accountability. The subcommittee recommended reduction of the net increase by $4,800 for the Treasury Management component. The proposal would also move the investment bank custody and investment management fees for the State Pension Investment Board into a new component to mirror the same segregation as done with the Permanent Fund Corporation. There were no changes to all other BRU's, according to Senator Sharp. Senator Adams interjected that he would not object to the incorporation of this subcommittee report. However, he did want to voice his concerns regarding the Child Support Enforcement Division. He said he might be offering amendments because of the new positions the division needed for the collection of funds for Alaskan children. The need for the positions came from new federal regulations relating to welfare reform. He wondered if this decrease would stop some of the day-to day activities of the division. He stated that the minority needed time to research their concerns. Senator Sharp then moved to adopt the DOR subcommittee report into the working document for the FY99 Operating Budget. Without objection, Co-Chair Pearce so ordered. The next subcommittee closeout to be heard was for the DEPARTMENT OF ADMINISTRATION. As chair of the subcommittee, Senator Phillips gave the presentation. Other members were Senators Green and Duncan. Senator Duncan did not sign off on the final report. Senator Phillips began by saying the subcommittee met its target for budget reductions. The subcommittee recommended reduction to the Longevity Bonus Program of an additional $3.117 million. This would be approximately $7.094 below FY98 and were the best estimates the subcommittee could arrive to as of March 20, 1998. The Smart Start Increments were not included for the Office of Public Advocacy or the Public Defenders Agency. However, the committee had three increments, which Senator Phillips felt were important. The first was $310,000 for the Office of the Commissioner for labor negotiation costs since all the contracts were about to expire. The next increment the subcommittee proposed granting was the Alaska Public Offices Commission because this was an election year. The final increment funded in the proposal was $485,000 for the Division of Motor Vehicles for licenses and manuals. Under the subcommittee's proposal, the Lease component was reduced by $996,000, which was a $650,000 increase from FY99. Senator Phillips added that the department had already identified $450,000 savings from renegotiated leases since the Governor's budget was published. A new grant of $25.9 was awarded in the proposal to the AIRRES, the radio reading service for the blind. The subcommittee recommended a reduction of $247,000 for the centralized administrative services. That brought the DOA total to $174 million, $263,900 of which was general fund dollars. Senator Adams asked if there was intent language within the Longevity Bonus Program stating that if the funding was insufficient for the number of applicants, a supplemental appropriation would be granted. Senator Phillips said there was none. He emphasized that he really worked with the department and the amount appropriated was the best estimate of the funds that would be needed. He offered to work on intent language. Co-Chair Pearce interjected she would rather work on it at a later time and Senator Adams agreed. Co-Chair Pearce didn't think there was statutory authority to allow the Longevity Program to prorate payments to participants. Therefore, any legislative appropriation was made with the understanding that if more people than anticipated signed up a supplemental appropriation would be made. Because of this, she didn't believe specific intent language would be necessary. Senator Adams' next question addressed the PDA and the OPA. He had concerns about unanticipated caseload increases. He noted the increased activity planned for the DHSS and surmised that would also cause an increase in need for public defenders and OPA services. He believed the committee was making a mistake by not funding the two agencies at least half the level of their requests. His next DOA concern dealt with the Central Administrative Services request. Until the second supplemental budget was decided upon, he believed it was difficult to see what the needs would be. He had a question on the Lease component. He wanted to know if the appropriation figure was arbitrarily chosen to allow the Majority's funding goal to be met. He worried that the department would need to come before the Legislature with a supplemental request to meet the shortfall. He summarized with a prediction that a supplemental budget appropriation would be necessary to meet all four of these items. However, he said he would not be objecting to the adoption of the subcommittee report, but would have some amendments. Senator Phillips responded to Senator Adams' statements, saying that OPA was actually going to receive a seven- percent increase over FY98. The PDA would be receiving an 8.8 percent increase. Senator Donley said he thought the increments for OPA were being denied and asked for explanation. Senator Phillips corrected the increments but denied the requested increases over the last year. There was discussion between Co-Chair Pearce, Senator Phillips and Senator Donley on this issue. JERRY BURNETT, aid to Senator Phillips came to the table to give clarification. He stated that the Smart Start increments were denied but the rest of the components from the Governor's budget remained in the plan. Senator Donley then voiced concerns about the level of funding awarded to the DMV. He spoke of poor public service in the Anchorage area. He argued that the public was paying for this service through fees and the agency should have expanded hours and more locations. SHARON BARTON, Director of Division of Administrative Services, spoke to the matter at the request of Senator Phillips. She stated that the allocation recommended in the subcommittee report was for the full amount requested. With that funding, the department planned to open additional satellite offices in Anchorage. She reminded the committee that the agency had taken other steps to reduce the lines in the Anchorage office, but it would take some time. It would take some time to shift customers from the public offices to the other venues of services. She expressed optimism in improved services. Senator Donley wanted to know if there was something in writing to set out that plan. Ms. Barton said the department had developed several status reports on their efforts and she would provide them to the committee. Senator Donley complained that the committee was promised the same results last year, but the lines had not gone down. He had proposed increased funding to help accomplish the goals, but the department had assured him they didn't need the extra funds. He didn't see any marked improvement in the length of lines at the DMV. Therefore, he was skeptical about being told not to worry; the division had adequate funds to implement the improvements. Ms. Barton responded that the electronic improvements, the IVR and On-line registration had taken time to build. They were complex systems and took partnerships to put into place. She stated the systems were now in place and handled 1500 transactions in the first few days of operation. Meanwhile, the division was negotiating arrangements with their commissioned agents to increase opportunities for the public. She understood that the senator hadn't seen line decreases yet, but qualified that these were not overnight solutions. The department believed the solution was on the horizon, she concluded. With two-year registration, it would take two years to realize the full benefits of the system, emphasized Ms. Barton. She also spoke of mailers sent out to tell customers of the different ways to do their DMV business. Senator Adams commented that an alternative in Anchorage was Speedy Lube, where emission certification was obtained and tags could be purchased at the same time. He felt it was a matter of educating Anchorage residents on the different options. Senator Donley countered that many other services still could only be obtained at the DMV offices. He added that while there may be some redirection of customers, the DMV lines hadn't shortened in part because the population had increased. Senator Donley restated his desire to have intent language written into the budget directing the department to accomplish these goals. Senator Phillips requested JUANITA HELMES, Director of DMV, meet with Senator Donley on this matter. Then if Senator Donley was still not satisfied, he would consider adding intent language into the bill. Tape #131 Side B, 5:30 p.m. Senator Torgerson agreed with Senator Donley that there should be a line item in the operating budget. He spoke of a situation with Dowling Road and the promise to build a separate location. Ms. Barton spoke to the Dowling Road situation and a solution had been reached to open a satellite office at the old Anchorage Data Center by July first. Co-Chair Pearce ordered the subcommittee report on the DOA held in committee. The next subcommittee report to be heard was for the DEPARTMENT OF MILITARY AND VETERANS AFFAIRS. Senator Phillips again gave testimony as chair. Other members were Senator Ward and Senator Adams. The subcommittee met its budget target of $7.370 million general funds. The recommended changes were as followed: Disaster Planning changed from $132,000 general funds to Disaster Relief Inter-agency Receipts. The AK National Guard would have an unallocated reduction of $50,900 general funds from the Office of the Commissioner. A $30,000 general fund Veteran's Affairs audit was discovered unnecessary and was recommended for exclusion. The subcommittee recommended adding $15,000 for statutory designated program receipt authority for the Medevac and Special Missions Reimbursement of the AK National Guard. The final recommendation was a $54.2 Oil and Gas funds increase for the Disaster Planning and Control grant for local emergency planning. Senator Phillips moved for adoption of the DMVA subcommittee report into the working document of the FY99 Operating Budget. There was no objection and Co-Chair Pearce ordered it adopted. The final subcommittee report heard at this meeting was for the DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS. The subcommittee was made up of Senator Mackie, Senator Hoffman and Senator Phillips, who served as chair. Again, the subcommittee met its target general fund goals. The Municipal Assistance and Revenue Sharing would be handled separately by the Senate Finance Committee of the Whole. Senator Phillips gave the presentation starting with recommended denial of the $34.4 increment for the Office of Alaska Legal Services. The subcommittee also recommended $208,600 below FY98 for the following components: Office of the Commissioner, Division of Administrative Services data and word processing, State Assessors, and the Local Boundary Commission statewide assistance programs. He stated that the department would need to determine where to specifically make those cuts. Senator Phillips then offered a motion for the adoption of the DCRA subcommittee report into the working budget of the FY99 Operating Budget. Senator Adams objected. Senator Adams spoke to the day care provision discussions held at the subcommittee meetings. He also wanted to know when the full committee would take up the Municipal Assistance and Revenue Sharing component, to which Co-Chair Pearce replied would be heard at Friday's meeting. His final question asked if the five-percent reduction was firm. Co-Chair Pearce said it depended whether or not Senator Adams offered an amendment. She believed the House Finance Committee also proposed a five-percent cut. [Tape Malfunction] Senator Adams maintained his objection. Co-Chair Pearce requested a roll call and the DCRA subcommittee report was adopted by a vote of 5-1-1. Senator Adams cast the nay vote and Senator Parnell was absent. Co-Chair Pearce announced the committee would continue with budget closeouts the next morning. She listed those departments that would be addressed. Senator Sharp added that SB 281 would also be heard at that meeting, starting at 8:45 a.m. Senator Donley clarified the original proposal for the Department of Commerce and Economic Development subcommittee was to delete $50,000 for the second minerals expert located in Juneau. The subcommittee altered that and made it a $50,000 unallocated reduction. The committee took a short break. [Note: tape malfunction, the following is contained on tape Co-Chair Pearce handed the gavel over to Senator Sharp and thus began the bill-hearing portion of the meeting. CS FOR SENATE BILL NO. 306(JUD) am "An Act relating to the authority to claim a child as a dependent for purposes of federal income tax laws; relating to certification of child support arrears." Senator Donley sponsored the bill and spoke to it as follows: "SB306 is a response to a problem that I had multiple constituents call me about beginning of this year. Under current tax law, even though a non-custodial parent, who owes child support, fails to pay the child support, if there's a court order existing that awards the deduction, income tax deduction to the non-custodial parent, the non- custodial parent continues to get the deduction even though they're not paying any child support." "This legislation is designed to facility a way to get that tax deduction back to a custodial parent who's now being forced with also paying, you know, not getting the appropriate child care payments and should be entitled to the deduction, but isn't getting the deduction because of an existing court order." "The Judiciary version facilitates that by saying, first of all, that for future cases in Alaska judges can't just give blanket awards of tax deduction to the non-custodial parent. The awards in the future would be conditional upon the non- custodial parent continuing to keep up with the child support." "And that standard that we've placed in the Legislation is the same standard that's currently in statute for the loss of a professional license. And we all may remember that, but to refresh the committee's memory, the existing standard we use for losage of professional licenses is that, if someone's more than four months behind in child support or they have established a payment plan because they have fell more than four months behind, and then they get a change to establish payment plan and they've fallen four months behind on the payment plan also. So they get two chances. Folks, who fail to pay support here, first they would have to fail to pay for four month and then if they establish a payment plan, they'd have to default on that for four more months. And at that point, just as with professional licenses, then the court would order the reversion of the tax deductions to the custodial parent. Because now the custodial parent is paying for the support of the child and should be legitimately entitled to the tax deduction." "And that's what SB 306 sets up." Senator Adams wanted to know the role the Internal Revenue Service would play. Tape #132 Side A, 5:50 p.m. Senator Donley admitted that working around the IRS was the hardest part. As long as there was an unconditional order, and unless the individual who had the court ordered deduction signed an IRS form turning over the deduction, or the court changed the order, the IRS would not accept the change. This bill would facilitate the court in making the change, which the IRS would follow. The law would also change the way the judges did business by allowing them to only grant the deduction on a conditional basis, according to Senator Donley. This would make it easier for the custodial parent who was not receiving the support to get the deduction. Senator Adams asked for an explanation of the conditional versus the unconditional court orders. He expressed approval of the legislation and only wanted clarification on that point. Senator Donley defined the conditional order as one where the tax exemption would revert to the custodial parent if child support payments were not made under the provisions of the bill. Senator Adams requested hearing the position of the Department of Revenue. BARBARA MIKLOS, Director of Division of Child Support Enforcement, came to the table and stated that the department supported the bill. Senator Donley added that the bill had a $25,000 fiscal note. He then offered a motion to move CS SB 306 (JUD) from committee with accompanying fiscal note. Without objection, Co-Chair Sharp so ordered. SENATE CS FOR HOUSE BILL NO. 11(JUD) "An Act relating to driver's licensing; and providing for an effective date." This was the first hearing on the bill. The committee invited JEFF LOGAN, staff to Representative Joe Green, to speak to the bill. He testified as follows: "HB 11 establishes a graduated driver's license system in Alaska, something that's being done in a number of other states. The bill starts out by requiring that a person between 16 and 18 years of age hold a graduated license. And then established that a person who is 14 years of age must get a permit in order to get the graduated license, increases the age that a person who must ride with the permitee must be from 19 to 22 years. And establishes a nighttime driving restriction period between 1:00 a.m. and 5:00a.m. when holders of a graduated license cannot drive. Establishes that if you accrue too many points during this period of provisional driverhood, you must attend a driver improvement course. And that's pretty much it." "Mr. Chairman, the bill has been around for a number of years and I think maybe each member of the committee has heard it at least once before in some other incantation. The sponsor started out trying to figure out some way to curb teenage driving deaths. And we were a bit ahead of our time here. He first introduced this bill, I think in the - well I know - in the Eighteenth Legislature and a number of states have adopted it since then. And it's gotten close but - here now and I'd be glad to answer any questions." Senator Adams asked for the differences between the bill versions explained. Mr. Logan pointed out that there was a corrected version of the bill, with the only difference being the referral. The bill bounced around at the end of sessionlast year. He detailed the committees the bill passed through. The changes made in the Senate Judiciary Committee version was the addition of sections five and six, which established requirements for the driver improvement course, according to Mr. Logan. Senator Adams questioned the provision prohibiting driving from 1:00-5:00 a.m. He wondered how his child who worked at a restaurant would get to work by 4:00 a.m. for the breakfast shift. Would there be a work waiver. Mr. Logan responded that was a concern shared by many Legislatures. Therefore, an exemption was allowed for transportation to and from a place of employment. Senator Adams then wanted to know the locations of the driver improvement courses. Mr. Logan knew of some in Anchorage and courses were available through correspondence. Senator Adams wanted a waiver for rural residents. His last point addressed the effective date, which was written into the bill as January 30, 1998. Mr. Logan did not have an amendment. He said he assumed the committee would change the date. Senator Torgerson stated there was not much in the bill he liked. He suggested amending the bill so it would only effect residents of communities of 200,000 or more. He argued that there might be a few young drivers making mistakes between the hours of 1:00 and 5:00 a.m., but felt that was a small percent of the population and this bill would punish everyone. He did not see any need for this legislation. Senator Phillips asked about special events such as prom night. Mr. Logan stressed hospital workers and public works staff gave the matter a great of consideration. For teenagers, prom night was the deadliest night of the year. He compared prom night for young drivers to the Super Bowl for domestic violence incidents. Mr. Logan offered that teenagers could go out on prom night and be home by 1:00 a.m. or, if they stayed out later, they would just accumulate a couple of points. If the driver did that too many times, he or she would have to attend a driver's education course. He said the intent of the bill was to get the police to notice the late-night drivers and to keep the young drivers at home. He felt that would keep the ambulances at home also. Senator Phillips wanted to know if there was any statistical proof that prom night was dangerous. Mr. Logan didn't know of any proof for that particular night. However there was a lot of proof nationwide and in Alaska that time of night was the most deadly time for a teenager. Senator Phillips agreed that on a continual basis, it was a problem, but felt that prom night was a special occasion and a graduation into adulthood. Mr. Logan explained how at age 14, an individual could get a driver's permit. At age 16, the individual could get a graduated license. Then at age 17, after holding the graduated license for one year, the individual could get a full, unrestricted license. Therefore, the prohibition would only affect 16 year olds and only last a year. Co-Chair Sharp asked if there was a requirement to first obtain an instructional permit. Mr. Logan referred to the first page, which stated that the permit was required in order to get the graduated license. Co-Chair Sharp wanted to know if any instruction was required to get an instructional permit, which Mr. Logan replied, was not. Co-Chair Sharp then raised concerns about increased auto insurance for young drivers who accumulated these points. He wanted to know if there had been any testimony on this matter in past committees. Mr. Logan didn't recall any testimony. He knew the insurance industry in general supported the bill. Senator Phillips asked how many states had similar legislation. Mr. Logan listed the states with nighttime driving bans as California, Florida, Georgia, Michigan, North Carolina and Ohio. States with the three-step graduation program were Connecticut, Kentucky, Maryland, Massachusetts, New York, Pennsylvania, West Virginia and Wisconsin. He added that a week ago, Maryland also enacted legislation. Senator Phillips wanted to know if in those states, had a reduction in teen accidents been documented. Mr. Logan referred to a study in Oregon that showed dramatic drops in accident and death rates for male drivers of this age. Senator Phillips asked if insurance rates lowered as a result. Mr. Logan did not know. Senator Adams referred to the age requirement of an instructional driver from 19 to 22 and wanted to know the reason. Mr. Logan responded that studies showed that at the age of 22, accident rates began to decline and the driving habits were more responsible. The intent was that people of the higher age could transfer their skills to the learning drivers. On that point, Senator Torgerson asked what the age of a guardian must be for a 14 year-old. Mr. Logan did not know. Senator Torgerson was also unsure, but thought a guardian could be as young as 18. He then complained that an older sibling guardian couldn't teach the younger sibling how to drive. The committee then heard testimony from MARTHA MOORE, Research Analyst for the Department of Health and Social Services. She spoke as follows: "I've just recently completed a research project studying specifically teen driving in Alaska. And it's been published in Alaska Medicine. I'll leave a copy of that article for the record." "Some of the things that I found in that study were that the rate of teen crashed in Alaska is two and a half times that of adults. And in the five years from 1991 through 1995, 99 people died in crashes involving teens, the 16 to 20 year old drivers. 517 people were hospitalized and 70 ended up with a permanent disability." "I also used a software program from the National Highway Traffic Safety Administration called Crash Cost. And through this program I was able to estimate what the cost was of those crashed during the five years and the estimate came to just over $300 million." "I also learned from my statistics from the Alaska Trauma Registry that 19 percent of those injured were uninsured and 26 percent billed a government program." "Last week the Juneau Empire reported on the results of a national study of driving death rates. And the report was that the overall trend is that driving death rates are declining but for 16 year olds across the country, they've almost doubled." "In Alaska we've seen similar things. Sixteen year-olds experience the highest crash rates. But by age 17 those crash rates go down 24 percent. And from 17 to 18 they go down another 22 percent and from 18 to 19, 21 percent. The reason the 16 year old drivers are more at risk on the highways is because they are young, because they're inexperienced and because the often engage in high risk behaviors." "There are a lot of factors that have contributed to the overall decline in driving death rates. Some of them are the shoulder harnesses, safer cars, education, stricter drinking and driving laws and better emergency medical service systems and trauma care. But now we have something that has come along that has been shown to reduce crashes in young drivers and teen drivers. And this is graduated licensing." "States that have adopted graduated licensing have seen a decrease of five to 16 percent in the crash death rates." "HB 11 does a couple important things. It requires drivers under the age 18 to have an instruction permit for six months. Currently there's no requirement in Alaska for young drivers to have an instruction permit. And one out of every four young drivers becomes licensed without ever having an instruction permit." "And also this bill requires the provisional license for a year in which the young driver must demonstrate that they're responsible enough to have a full independent license." "I fully believe that the day will come when every state has some form of graduated licensing in place because it has been shown to be effective in saving lives and in saving money. And in Oregon, for example, they, the state estimated that graduated licensing would save their state $11 million." "The Department of Health and Social Services supports this legislation and urges passage of HB 11 this year in order to take advantage of the funding that National Highway Traffic Safety Administration has agreed to provide Alaska to implement this program." Senator Phillips referred to Ms. Moore's statement that a young driver was 2.5 times as likely to get in an accident compared to an adult and wanted to know if that applied to Alaska. Ms. Moore affirmed. Senator Phillips asked how that compared to other states. Ms. Moore couldn't answer specifically, but did say that across the country the figure was about the same. Co-Chair Sharp commented that Alaska also had worse roads. Senator Adams speculated that all committee members shared concerns over the health and safety of children. He wanted to know if the same safety results could be accomplished through an educational program. He asked the researcher about the point system and if she studied the potential insurance cost to parents of young drivers with the implementation of the point system. Ms. Moore replied it was considered that the most effective way to prevent injury was through better engineering. The second best way was through policy and the third best way was through education. She said education was generally shown to be the least effective of the three methods. Regarding the insurance rates, Ms. Moore stated that a fatality from a crash would probably affect insurance rates to a much greater degree than the point system. Co-Chair Sharp called upon JOHN GEORGE, who testified as follows: "I'm here today representing the National Association of Independent Insurers, property casualty insurers including Allstate, Gyco, USAA, roughly half of the automobile insurance in the State Of Alaska. We definitely support graduated driver licensing." "But I can come at this from a couple of different directions. I'm also an assistant volunteer fire chief in Juneau and I've scraped a lot of people off the road, both youthful drivers and older drivers. And one of the things that I see as a common trait is that some of those older drivers didn't learn how to drive very well when they were 16. And I think this bill goes a long ways to training people right. Let's give people proper instruction under proper supervision, restrict their driving between 1:00 and 5:00 in the morning, which is not a horrible restriction. And they will learn to be better drivers and they'll carry that with them through the rest of their lives." "As an assistant fire chief, there basically two nights that I don't sleep, prom night and graduation night. I live in fear. We've had some horrible accidents in Juneau on those nights. We haven't in the last couple years, knock on wood. But the potential is always there because, you're right, they consider that a right of passage and they go and do strange things. So if - maybe we ought to pay for taxi cabs and tell them they can't drive at all those nights." "But I do think that proper training at an early age when they're learning to drive will make better drivers out of them for the rest of their lives and reduce the accident rate in all age groups." "I have a 16 year old daughter and she doesn't like this bill at all. But I'll tell you, she had a learner's permit for two years, she went with experienced drivers for two years. She's now 16 and she does not drive between the hours of one in the morning and five in the morning ever, because I won't let her. And I know all the policemen too." "But I think it's really the right thing to do. I think in the long run it will make a lot of difference in all age groups." "You did ask a question, Senator Phillips, about insurance rates and I can speak to that. Insurance rates are based on losses. They have to be approved by the Division of Insurance. They have to document the losses they pay versus the premiums, administrative costs and all that. And to the extent that accidents go down, losses go down, insurance rates will go down. So if this bill has the intended result, not only for those youthful drivers but for everyone, in theory, everyone's insurance rates will go down because the accidents have. Now if it doesn't work, if accidents don't go down or if costs accelerate because medical bills go up, or something else, you may not see a direct correlation. But losses is what drives the premiums." Senator Phillips wanted to know if there were statistics for the states with these laws showing if the rates had dropped. Mr. George replied there were a lot of things that affected insurance rates. To say that these laws made a difference would be impossible because there were so many different factors. But to the extent that it had affected accident costs, then it would have reduced the rates in those states for that increment, he answered. There was some discussion about graduation night. Senator Torgerson asked if there were statistics showing a drop in the teen-drinking rate since the legal age for alcohol consumption was raised. He said the same arguments were raised during that debate about saving lives and insurance rate deductions. He wanted to know if insurance rates had dropped since the inception of that law. Mr. George said he had no idea and spoke about the possibility of reduced accidents if teens were not drinking and driving. Senator Torgerson wondered why Juneau didn't pass a curfew. Mr. George spoke of the curfew he imposed on his daughter. He realized that a city curfew might solve Juneau's problem, but felt that the real issue was that kids shouldn't be driving late at night. He qualified that these laws were all subject to police discretion and there was leeway for enforcement. Mr. George stated his belief that this was a pro-kids bill. It wasn't meant to punish young drivers, but to give a tool to law enforcement, in his opinion. Senator Torgerson disagreed. He pointed out that every community had authority to set a curfew. He didn't think the bill made sense for rural Alaska. He restated his desire to amend the bill to only affect large communities. Co-Chair Sharp requested JUANITA HENSLEY, Director of DMV; come to the table to answer questions. She made a statement as follows: "The Department of Administration certainly supports this endeavor and I have been working on this topic for a number of years now. Actually this is the third year that this bill has been in front of the Legislature to pass in some form or another." "We feel that it is a great deterrent against a lot of youth from, not necessarily to punish them for driving, but to give them the experience that they need to obtain. Our youth, because we do not have driver training in our schools here and we do not have mandatory training required before they get a driver's license as in some states. So our youth have a tendency to learn by trial and error. And a lot of times it ends up in a fatality or serious injuries." "Just to kind of touch base on the driver improvement program. Driver Improvement Program in this bill is not a mandatory thing. The person has an option of taking that if they so chose. If they are issued one citation, they have an option of taking a defensive driving program and it would reduce their point total by two points." "So with that I will answer any questions that you have." Co-Chair Sharp wanted to know where the $163,000 revenue shown on the fiscal note would come from under this bill. Ms. Hensley replied that it would come from the issuance of the instruction permit because currently not everyone was getting the permits. Revenue would also be generated at the time that the driver graduated from the provisional license and paid $10 for an unrestricted license. It was clarified that a Learner's Permit and an Instructional Permit were the same thing and would require that the holder drive with someone 22 years or older. Ms. Hensley explained again the graduated procedure laid-out in the bill. She added that some states were no longer requiring driver's education because of the costs to the schools. Some states offered insurance rate reduction incentives for drivers to take the courses. She shared a newspaper article about an accident that happened in the early morning hours of prom night on the Kenai Peninsula. She had other articles as well. Senator Torgerson argued that under this bill, those incidents would have been excused and the drivers would still have been out. He restated his disapproval of the bill. Senator Phillips asked if the restrictions would apply to the summer months as well as the rest of the year, which Ms. Hensley affirmed. Senator Phillips talked about his youth were he would go camping after baseball games. He stressed there were a lot of good kids doing legitimate activities. Ms. Hensley responded that if the curfew provision was going to kill the bill, the department would accept its removal. Eliminating the curfew would not prevent the qualification for the $70,000 National Highway Traffic Safety Administration Grant. Senator Torgerson suggested lowering the number of points accumulated before a driver's license was suspended. He also took issue with the requirement that a licensed driver must be at least 22 years of age to accompany a learning driver. He again argued the guardianship issue of siblings not being able to teach their younger sibling how to drive. Ms. Hensley told the senator there was a very low incidence of the 18-21 year old guardianship. On the suggestion of lowering the point system, she said the current system allowed a driver to take a course to lower their point total. The intention was not to take driver's licenses away. She spoke of the different violations and the points assigned. Co-Chair Sharp didn't know what good the legislation would do since, in his observation, many of the drivers cited had revoked or suspended driver's licenses anyway. He ordered the bill held in committee to allow members to consider amendments and to work with the sponsor. Tape #132 Side B, 6:35 p.m. CS FOR HOUSE BILL NO. 193(FIN) am "An Act relating to financial assistance for students attending certain graduate education programs; and providing for an effective date." LYNN SMITH, staff for the House Health, Education and Social Services Committee, came to the table to speak to the bill as follows: "I really do wish that Representative Bunde could be here but he's on a meeting on the second floor." "HB 193 would convert the WAMMI Medical Education Program into a loan program. Alaska is investing an average of $43,750 per student per year and historically, less than 50 percent of these students are returning to Alaska to practice medicine. Currently the WAMMI program has no real incentive for students to return to the state upon completion of their education. The purpose of this bill is to provide an incentive for these students to return to Alaska bringing with them the benefit of their medical training." "If the graduate medical professionals who benefited by this program chose to return to Alaska to work, HB 193 has a forgiveness provision of 20 percent per year for up to five years of work in their field of medicine. If they decide not to return to the state after terminating their studies, repayment would be required to begin not later than six months after the students complete their studies and are no longer in a medical residency or medical fellowship program." "Those who fail to return and practice in Alaska will pay the tuition differentials represented by the non-resident tuition and you have a chart of that in your packet, which are only a portion of the fees that support the WAMMI program." "If they chose to return to the state later than six months, forgiveness would only apply to that portion that has not yet been repaid to the State." "Converting this program to a loan program and including a provision for loan forgiveness may be just the incentive needed for Alaskans to bring their new skills back home. And this would expand the support for the continuation of the WAMMI program for Alaska's future doctors." "I can try to answer questions, or if not, Diane Barrans from Postsecondary Commission probably can do a better job than I can." Senator Adams asked about the funding source. DIANE BARRANS, Executive Director of the Postsecondary Education Commission, told the committee that the funding source would remain the same. Senator Torgerson pointed out language saying that the "section did not apply to loans received under AS 14.43" and asked for clarification. Ms. Barrans explained that the statute was a reference to the Alaska Student Loan Program. The intention was to make it clear that borrowers of those loans would not receive the same forgiveness consideration as in the WAMMI program. Senator Adams spoke to differences of proposed allocation between the House and Senate budgets and wanted to know if the difference was a result of this legislation. Ms. Barrans stressed that any short funding of the WAMMI contract could impair this program. She explained the agreements with states that participated, and the cost-study analysis to ensure that each state paid its proportional share. If Alaska was to short fund their portion of the contract, she anticipated ramifications. Senator Torgerson asked where the loan repayment funds went, the general fund or back into the WAMMI program? Ms. Barrans answered that it was not specified in the bill and would therefore return to the state general fund. Senator Pearce moved for adoption of Amendment #1 and spoke to the amendment. She read, "if a student was outside the state due to performing service to satisfy an obligation under the National Health Service Corporation, Indian Health Service or the Uniform Service Scholarship program, they can defer repayment." The issue arose when the question was asked how WAMMI students who participated in these other programs and had these obligations, would be handled. Under these programs, the participants were required to go where the federal government sent them, she told the committee. This amendment would allow consideration for these students. She pointed out that the students would still be have their WAMMI obligations, but would be granted a deferral. Senator Donley wanted to require the student maintain an Alaskan residency during their service in the federal corps. Senator Pearce said other states had the same laws. She wondered if the students performing the federal governmental services were still eligible for PFDs. Ms. Barrans speculated that beyond the graduate portion, the students would not qualify. Senator Pearce told Senator Donley that the loan repayment would be deferred but still required. She didn't know how the students could legally be forced to keep their Alaskan residency, and didn't think it really mattered. Co-Chair Sharp asked how many people this would affect. Ms. Barrans expected little to no students who would be participants in both the WAMMI and the federal service programs. Senator Pearce guessed there must be some or the University would not have brought up the issue. WENDY REDMOND, Vice President of University Relations joined the discussion and stated there had been one student in the past for which this provision would apply. She advised that while the bill was being drafted, it should be done correctly to avoid any future problems. Co-Chair Sharp wondered if this would not apply if the student was serving in Alaska. Senator Donley pointed out that it would because the student would still need deferment. There was no further discussion on Amendment #1 and it was adopted without objection. Senator Donley asked Ms. Redmond about a cost breakdown he had requested earlier. Ms. Redmond said she had supplied that to his office and spoke a little about the program costs. She and Senator Donley discussed the breakdown. SUZANNE TRICK [phonemically spelled] from the University of Washington came to the table to answer any questions. Senator Donley voiced concern over the amount of the subsidy for the WAMMI program. He also wanted to realize immediate cost savings, pointing out that this proposal wouldn't show any cost savings for at least four years. Then where students returned to the state, there wouldn't be any cost savings. He referred to another bill, which would reduce costs to the state immediately by requiring some of the $13,220 to be paid by the student. Representative CON BUNDE arrived at the meeting and added to the discussion. He stressed that these students were going to graduate with a substantial debt. Rather than cut support to the individual student, he suggested reducing the number of students allowed into the program. He didn't think it did the students any favors to allow them to graduate with a large debt. Senator Donley felt that was an important philosophical question. Currently, ten students per year were admitted into WAMMI no matter how many qualified for medical school. Co-Chair Sharp noted that the bill Senator Donley referred to was in the Senate Rules Committee. Senator Donley said in that committee, he and other members had been working with WAMMI to fine-tune the proposal to allow medical students to borrow additional money to pay toward the cost of tuition. This would reduce the cost to the state beginning in the next fiscal year. Co-Chair Sharp ordered the bill held in committee to allow Senator Donley to work with the sponsor to alleviate his concerns. Senator Donley stated that he did like what the bill would accomplish, but also wanted to see some immediate savings. He didn't think the two bills were incompatible, and that both bills should pass. He talked of efforts he would make in working on this and the other bill to allow them both to pass into law. HOUSE BILL NO. 197 "An Act relating to libraries." Senator Torgerson requested hearing from GEORGE SMITH, Deputy Director of the Division of Libraries, Archives and Museums. Mr. Smith spoke as follows: "As Senator Torgerson mentioned, this was introduces as SB 148 in the last session and had its hearing in Senate HESS. And it was passed out. But at the same time, it was co- introduced on the House side as HB 197. Passed through committees and was passed without dissent on the floor several weeks ago." "Basic in this - well, there's several intents in this law. Currently the State Of Alaska, although it has a Public Library Assistance Grants program, has no definition of what a public library is. This bill will give definition to public libraries - to libraries, how they can be structured and managed. Primarily either through the municipal law or through non-profit corporation." "When the Public Library Assistance Grant was first passed in 1982 under its current status, it greatly - it was intended to encourage the establishment and development of public libraries. The result is that over the years about 55 new public libraries were established. Unfortunately, about half of those have disappeared over the years because they simply did not have proper administrative or fiscal integrity to survive." "One of the major problems was that the basic grant of $5000 was given to a qualifying public library without requiring any local contribution of any kind. It could however get an additional of $5000 on a one-to-one basis with local contribution. We have found that virtually all the libraries that came and went over this period of time were those that had no local contribution." "What this law will do is require a contribution, a one-to- one match to be eligible for the program. With a minimum amount of local contribution of $5000 so that a local entity realized it has to have some local effort in order to be qualified and have some hopes of succeeding." "It will benefit some libraries that have not benefited in the past. And that is the way the law is currently written is, in-kind contributions are not allowable as match. This really works against a small entity that has a very strong volunteer corps that runs its library. This will allow them to use that as local match in the future." "The reason that we are changing from a $5000 basic grant and up to an additional $5000 matching is that quite frankly, there's not been enough money in the grant program to ever fund a library more than $7000 in the last five years in any case. Simply because there are more libraries competing for the money. So we're just making to the maximum amount that we've been able to fund over the last four or five years anyway, which is $7000." "And just as a last part, we are recommending the repeal of "two O" public library construction grant program that simply do not exist anymore. They've not been funded since 1989. And also a federal grant program that was administered by us ceased to exist two years ago. So clean those off of the books." Senator Adams commented that the way the bill was written would make it easier for public libraries to receive grants. He wanted to know what would happen if Section 7, dealing with public library construction grants were repealed and then, federal money became available in the future. Mr. Smith replied that grant system was replaced in FY97 by a totally new program, which concentrated on technology. There was no intent to continue federal support of construction, according to Mr. Smith. Senator Donley asked if the program would be run through the Department of Education, which Mr. Smith affirmed. Senator Donley objected to the in-kind service language. If the justification was groups with a lot of volunteers, he felt the volunteer groups could easily raise the needed money for the state match. He believed there was a lot of abuse of other in-kind services by current administration. Therefore, he didn't feel the Legislature should give discretion on this program. He qualified that he strongly supported volunteerism and felt they could generate the matching grant money. He also had concerns with Section 5, saying that the State should not be in the business of dictating public library board guidelines. He thought local communities should be able to set the guidelines. He spoke to the language in the bill setting out requirements for the library infrastructure. Senator Adams wanted an example of where the abuse of in- kind services had occurred. Senator Donley responded his comments did not refer to libraries, but to municipal matching grants programs. Mr. Smith spoke to the potential abuse of the in-kind service provision. Theoretically it could happen, but he thought that the small public libraries currently operating on volunteer services were some of the most responsible in the state. He didn't anticipate new communities entering the program unless they were able to raise funds or else had a solid volunteer service. He spoke further of the volunteer efforts in small communities. To respond to the second concern, the elaborate language setting the public library structure, Mr. Smith explained that if the municipality did not have its own system set up, this was the system they would use. He referred to non- profit corporations that could use this set-up as their governing body. For most cases, this would not be an issue since most libraries were already managed under municipal governments, according to Mr. Smith. Senator Donley then addressed page two of the bill, where it was written that only one library in a community was eligible for a grant during a fiscal year. He spoke of the many neighborhood libraries in Anchorage and said that many were run through strong volunteer efforts. This provision would exclude those libraries. Mr. Smith responded that the City of Anchorage had governing powers of the libraries and that no other entity in the municipality would have the right to offer those. Senator Donley didn't understand the answer. He argued that just because the City of Anchorage had taken upon it to provide libraries they shouldn't be shortchanged. Mr. Smith clarified that each library branch would receive a grant. Therefore, the main library and each of the five outlets would qualify for a grant. If more branches were built, they would also qualify for a grant, he explained. Senator Donley didn't see that language. Mr. Smith offered that it might be contained in the original law because the program had been run that way since its inception in 1982. There was further argument on the allocation of one grant to each of the Anchorage branch libraries and whether language in the bill stipulated the intent. Co-Chair Sharp ordered the bill held in committee. He announced the committee would meet the next morning. ADJOURNMENT Co-Chair Sharp adjourned the meeting at approximately 7:15 p.m. SFC-98 (1) 4/20/98 pm
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