Legislature(1997 - 1998)
04/22/1998 09:22 AM Senate FIN
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MINUTES SENATE FINANCE COMMITTEE 22 April 1998 9:22 a.m. TAPES SFC-98, #135, Sides A and B CALL TO ORDER Senator Drue Pearce, Co-chair, convened the meeting at approximately 9:22 a.m. PRESENT In addition to Co-chair Pearce, Senators Sharp, Phillips, Donley, Torgerson, Parnell and Adams were present when the meeting was convened. Also Attending: Senator JERRY MACKIE; SHARON BARTON, Director, Division of Administrative Services, Department of Administration; WENDY REDMOND, University of Alaska; REMOND HENDERSON, Director, Division of Administrative Services, Department of Community and Regional Affairs; JUANITA HENSLEY, Department of Motor Vehicles, Department of Administration; CHRIS CHRISTENSEN, Staff Counsel, Alaska Court System; DIANE BARRANS, Executive Director, Post Secondary Education Commission, Department of Education; DWIGHT PERKINS, Legislative Liaison, Office of the Commissioner, Department of Labor; BRETT HUBER, staff to Senator Rick Halford; ANNETTE KREITZER, staff to Senator Loren Leman and Senate Labor and Commerce Committee; PAUL GROSSI, Director, Division of Workmen's' Compensation, Department of Labor; EDDIE GRASSER, staff to Representative Beverly Masek; MIKE GREANY, Director, Division of Legislative Finance; Dave Tonkovich fiscal analyst, Division of Legislative Finance; Fred Fisher, fiscal analyst, 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. 17c, 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." Senator Phillips briefly explained the Department of Administration subcommittee closeout. He reviewed the changes and reductions, specifically noting the reduction to Longevity Bonus in the amount of $560,000 from the Governor's amended version of the budget. He also noted the reductions to the Office of the Public Advocate and the Office of the Public Defender. There was a general deduction in the Division of Finance in the amount of $286,000. He MOVED the Department of Administration subcommittee closeout. Senator Adams OBJECTION. He requested Sharon Barton from the department be invited to join the committee. He said he wanted to know the problem areas of the subcommittee report. SHARON BARTON, Director, Division of Administrative Services, Department of Administration was invited to join the committee. She said the Longevity Bonus cut should not be a problem because they were still funded at the high range. However, the level of the reduction to the Office of the Public Advocate and Office of the Public Defender may well result in a supplemental in 1999. The Commissioner's increment for $310,000 and APOC for $167,000 are priorities for the department and they have previously spoken to those details. It had been requested that those increments be rolled into the supplemental bill as one-time items using Longevity Bonus grants surplus from this fiscal year. She was also concerned about the reduction to the Division of Finance and explained there will be a charge- back or pro-ration for services. She reviewed the cut in Oil and Gas Conservation Commission in the amount of $250,000. She explained that $200,000 was for additional inspection staff to deal with the increase in drilling activity on the Slope. She also said the remaining $50,000 were for the State's dues for IOGC of which the State has been a member for many years. She explained a comparison to FY '98. Even though the costs this year are over and above, they would try to hold down on a supplemental request for FY '99. She said the reduction to the Division of Motor Vehicles in the amount of $485,000 was for license plates, manuals and equipment. These items have to be purchased for FY '99 as they do not have an ample supply on hand. If not funded it will be the same as a staff reduction or general reduction to DMV and will be taken by necessity from the personal services line item. The impact of that reduction would be those satellite offices now being contemplated for Anchorage and Matanuska Valley would not be established. It will take away their opportunity to redeploy staff from the back office into the front office to help eliminate long lines at DMV. Field service operations will also be reevaluated, especially the one-person offices that are less efficient than the larger offices. They will try to find a more cost-effective way to deliver services to the outlying communities. Senator Sharp asked if any numbers were available on how many people were using the relicensing tag options through emission control offices and new car dealers? JUANITA HENSLEY, Division of Motor Vehicles was invited to join the committee. She said the numbers were available at her office and she would get them to him promptly. She did note, however, that in 1997 the two dealers on line to issue titles for DMV issued only ninety-seven titles for that year. New dealers were being brought on this week. Those were: Anchorage Chrysler, Eero Volkswagen, Saturn, Continental Motors, Honda, and Dollar Rent-a-Car all of Anchorage. One dealer in Juneau is waiting the proper hardware so they could also come on line. Senator Adams asked the subcommittee chair what their position regarding the Office of the Public Advocate and the Office of the Public Defender in regards to Smart Start was. Senator Phillips said he thought that was going to be considered in another budget. Senator Adams also questioned the elimination of $310,000 from the Commissioner's Office for negotiations on on-going or future contracts and how that was going to be handled. Senator Phillips said the subcommittee would rather have those items addressed in a supplemental. Senator Adams advised Co-chair Pearce that he MAINTAINED his OBJECTION. By a roll call vote of 5 yeas (Pearce, Sharp, Donley, Parnell, Phillips) and 1 nay (Adams) (Torgerson absent) the Department of Administration subcommittee report was ADOPTED. Co-chair Pearce advised that the Department of Transportation closeout would be at 4:30 p.m. this afternoon. She then passed the gavel to Co-chair Bert Sharp. (pause on record) SENATE BILL NO. 219 "An Act relating to establishing an office of crime victims' advocacy; and amending Rule 16, Alaska Rules of Criminal Procedure, Rule 9, Alaska Delinquency Rules, and Rule 501, Alaska Rules of Evidence." CS FOR SENATE BILL NO. 219(JUD) "An Act relating to establishing an office of crime victims' rights; and amending Rule 16, Alaska Rules of Criminal Procedure, Rule 9, Alaska Delinquency Rules, and Rule 501, Alaska Rules of Evidence." Co-chair Sharp called SB 219 and noted that there had been a previous hearing. He said at that meeting it was noted that some members might be bringing forth some amendments and they also wanted a chance to discuss the matter with the sponsor of the bill. BRETT HUBER, staff to Senator Rick Halford was invited to join the committee. He said there was one technical correction to the amendment marked "F.2", on line 16. It was to delete the word "crime". He said even though the title of the bill was the Office of Crime Victims Rights, the actual implementing statute in the bill describes the Office of Victims Rights. Co-chair Sharp advised the committee that was marked as amendment #3. Senator Donley MOVED amendment #1 and WITHOUT OBJECTION it was ADOPTED. Senator Donley MOVED amendment #2 and WITHOUT OBJECTION it was ADOPTED. Senator Donley MOVED amendment #3 and WITHOUT OBJECTION it was ADOPTED. Senator Adams said he felt it was a great piece of legislation however it needed backbone behind it, and that was the fiscal note. He said he hoped they would support this fiscal note. Co-chair Sharp said they would request a new fiscal note to represent the amendments. However, Senator Adams said that the way the bill read today and when the Office of Crime Victims Rights was established there was a cost to doing that. He felt support was needed. Senator Donley said there was a funding source available in the approximate amount of $4 million. Senator Adams said the committee should pass along the fiscal notes in case something happens. He said it was a big if pending the passage of other legislation. Co-chair Sharp said it was his intention that the accompanying fiscal note would not be built into the budget unless Senator Ward's other bill passes. Senator Donley said they could also put the second year PFD provision into the bill and then it would be totally self-contained. Everything is in the bill at present except for that one provision. He offered a technical amendment to have a new CS drawn up for SB 274 containing the same language. Co-chair Sharp indicated that was the only fail-safe way to accomplish that. Senator Donley concurred and said it would then be a total package. Senator Donley MOVED conceptual amendment #4 to add the provisions in SB 274 which extends the eligibility time for convicted felons and multiple misdemeanants from one to two years in a new Finance CS for SB 219. The intent would be to then get new fiscal notes based on that CS. Mr. Huber said the sponsor would have no objection to amendment #4. He noted that SB 274 was on the Senate Floor today. The only concern was to move SB 219 along as quickly as possible. Senator Pearce advised the committee that if the bill passed both bodies they would be dealing with the fiscal notes in conference committee anyway. She wanted it clear for the record that it was not the intention of the sponsor of the bill that the entire four million that would be raised would go to an office of victims' advocates. Instead, they were just talking about just the half-million dollar fiscal note, which realistically would be an increase of that amount to the Legislature's budget. Senator Donley explained that if the second year of PFD eligibility was taken away and the conference committee was presented with a positive four million dollar fiscal note it would then be up to the conference committee to figure out what to do with the money. There would be an accompanying fiscal note with this bill that half a million dollars of it would be going to the office of victims' advocacy and it would also be a GF increase of three and a half million dollars beyond that which could then be used for other purposes. Co-chair Sharp asked if those purposes were as stated in SB 274? Senator Donley indicated that was correct. He said this would give the conference committee some flexibility with the GF. Senator Pearce indicated that would be fine. Senator Phillips asked if that was half a million dollars to the Legislature's budget? Senator Pearce explained the office was in the Legislature. It would increase the Legislature's budget by half a million dollars; $508,600. Co-chair Sharp said he and Senator Donley would work with his staff to get this rolled into the bill properly and then get it back before the committee in the afternoon if possible. He said it would remain at the top of the list before all other bills. Co-chair Sharp said it was his intention to move the bill from committee today if possible. Senator Adams said he agreed with the conceptual amendment the members. Senator Donley indicated that it was going to be incorporated into a new CS and then brought back before the committee. Co-chair Sharp said with that understanding then he would HOLD the bill in committee until the afternoon. The next bill Co-chair Sharp called before the committee was HB 334. SENATE BILL NO. 334 "An Act relating to guidelines and standards for state training programs; and relating to the Alaska Human Resource Investment Council." Senator Donley explained the bill for the committee. He said it would add peace officers and firefighters to an existing statute that provides for waiver of state educational institution fees for the survivors of members of the armed services who died while in service to their country. He also said it would limit the waiver to undergraduate students. There was also a proposed technical amendment from Legal Services drafters who identified a glitch in the title. He advised members that the proposed amendment was in their packets and proceeded to offer this as amendment #1. The reason for the change was that because of some of the minor modifications to the existing statute there would be an impact on survivors of members of the armed services and it should have been included in the title coming from the House. Senator Donley said there was a legal opinion supporting the amendment. He further cited under Uniform Rules 41(b) that allowed amendment of titles when it was a technical defect. Senator Donley MOVED amendment #1. Senator Adams OBJECTED. He asked if this amendment was for residents of the armed forces that served in Alaska or did it include those that served anywhere in the other States. He assumed it referred to those armed forces from Eilson Airforce Base, Ft. Richardson or Elmendorf Airforce Base who are taken care of. However, he didn't feel the bill was written this way. Senator Donley said he had the same question when he first studied the bill but found the answer in the definition segment of the bill. However, he felt that Senator Adams' comments did not relate to amendment #1. Senator Adams still felt there were problems when "armed services" was included in the title. He asked if page 2, line 24 would clarify the matter? (There followed a brief pause on record.) Senator Donley said he had read in the bill that the person who died in the line of duty had to be a resident of Alaska. Co-chair Sharp indicated that it was referred to on page 2, lines 24 and 25. At this time Senator Adams REMOVED his objection. Co-chair Sharp said there being no further objection, amendment #1 was ADOPTED. Senator Pearce asked how many volunteer firefighters there were in the State of Alaska. Senator Donley said there were quite a few volunteer fire departments in Alaska other than the few major municipalities who had professional fire departments. However, the bill only would kick in if an individual actually dies in the line of duty fighting a fire. He indicated Anchorage had lost one firefighter in the line of duty in the past decade. Co-chair Sharp indicated that his recollection of watching Gavel-to-Gavel while the bill was in House Finance Committee there had been possibly only five firefighters who had died in the line of service during the last twenty years. Senator Phillips said that in the packet provided members' files there were between eight and ten firefighters killed in the line of duty. Senator Pearce said her concern was the Legislature had already asked the University to cut their budget and did not feel it fair to ask them to absorb another free program. Senator Adams MOVED SCS CS HB 334(FIN) as amended in committee with individual recommendations and accompanying fiscal notes. WITHOUT OBJECTION the bill was REPORTED OUT with individual recommendations and accompanying fiscal note from the University of Alaska in the amount of $5.4. Co-chair Sharp then called SB 336. SENATE BILL NO. 336 "An Act relating to excluding professional hockey team members from worker's compensation coverage." ANNETTE KREITZER, staff to Senator Loren Leman and the Senate Labor and Commerce Committee was invited to join the committee. She explained that the bill would amend the Workers' Compensation provisions by adding professional hockey teams to the list of persons not covered under AS 23.30.230. In exchange for the exemption a team owner would have to provide a medical and disability program to cover the players and anyone else associated with the team who is in the same workers' comp risk category. This would include coaches and assistant coaches but not office personnel. The owner would be responsible for the premium on the cost of the coverage. This was the same approach taken by the State of Florida. She further explained that the team members were now paying $200,000 in workers' comp for the season, which runs fifty-two games. The average salary for the players is about $300 to $500 per week. Senator Phillips asked if this would also cover officials? Ms. Kreitzer said anyone in the category of coaches and assistant coaches were covered. He asked how the players felt about this bill. Ms. Kreitzer said the testimony in Senate Labor and Commerce indicated that the players were in favor of this bill. They had concern that the cost of the workmen's' comp they were now paying would affect the ability of the team to continue. DWIGHT PERKINS, Special Assistant to the Commissioner, Department of Labor was invited to join the committee. He said there was no opposition by the department to this legislation. The department had notified the employer association that they would be liable for any damages and it would not prevent the employee from going to Court in order to seek damages. He further noted a zero fiscal note to the Department of Labor. Senator Donley asked why coaches were included in the coverage? Ms. Kreitzer explained that they were in the same workers' comp risk category so they were lumped in with the players. Senator Phillips indicated that sometimes the coaches were the players. Senator Donley said then it should be indicated as "player-coach". Otherwise a coach is an employee just like anyone else and they should be in the workers' comp program. Further, a coach who sits on the sidelines should not be rated the same as a hockey player. The solution, therefore, he felt would be to go to the Division of Insurance and get the rating changed. Ms. Kreitzer suggested the committee hear from Paul Grossi as to how the coaches were included in the rating. Senator Donley further commented that as a professional business, the coaches were being paid a salary to do a job. They were not actual players nor were they involved in a contact sport. They were administrators and it was a different situation. Everyone thinks they should be exempt from Workmen's' Compensation, however, they do not think it is so great when problems occur because of the exemption and then they are all tied up in Court and there is no reasonable compensation available to one who suffers a reasonable injury. He did not feel this bill was reasonable. PAUL GROSSI, Director, Division of Workers' Compensation, Department of Labor was invited to join the committee. He said he did not have an answer as to why coaches were included. The Division of Workers' Compensation did not oppose the bill, however. Perhaps the Division of Insurance would be able to provide an answer. Ms. Kreitzer further commented that they had met extensively with the Anchorage hockey team and had asked them to speak with the Division of Insurance and the Division of Workmen's' Compensation. She noted that after their discussions only office personnel should be exempt. (Tape #135 switched to Side B at log #593.) Ms. Kreitzer continued that the coaches and assistant coaches were actually playing and therefore exposed. Therefore they fit the description of those to be covered. However, office personnel did not. It would also cover them in their travels with the team. Senator Phillips said in this sport coaches were much more involved physically than other sports. Senator Donley asked if the coaches actually went out and played during practices? Senator Phillips indicated they did. Senator Donley then concurred that the bill made sense. Senator Phillips MOVED SB 336 with individual recommendations and one accompanying fiscal notes. WITHOUT OBJECTION it was REPORTED OUT with individual recommendations and zero fiscal note from the Department of Labor. Co-chair Sharp called HB 231. HOUSE BILL NO. 231 "An Act relating to regulation of snowmobiles." EDDIE GRASSER, staff to Representative Beverly Masek was invited to join the committee. He explained the bill was introduced on behalf of the Alaska State Snow Machine Association and the Anchorage Economic Development Corporation. The requirement for registering a snow machine has been in the statutes since 1968 and currently is in Title V. The bill would now put the registration of snow machines in the Division of Motor Vehicles and would allow dealers to do a point of sale registration. He said one of the main reasons for this bill was that the formula to receive monies out of the National Recreational Trails Fund was based on the number of machines registered rather than numbers of machines sold. Monies for this fund come from a national tax on gasoline and is based on a formula on how many gallons of gasoline sold was actually used by off-road vehicles or non-highway vehicles. Representative Masek's interest was that Alaska receives the trail funds so that there were places for individuals to ride. A good example was in Anchorage where one was no longer able to snow machine due to city ordinances. In receiving these trail funds it would enable them to preserve some corridors and snow machine trails through Anchorage or the Matanuska Valley. There is currently a trail between Fairbanks and Anchorage being worked on. Representative Masek also felt this would help promote tourism in the State. Senator Parnell referred to page four of the bill. Mr. Grasser identified that the correct bill should be the Labor and Commerce version now before this committee. He said the House Finance Committee removed the equipment requirements regarding off-market products and eliminated that portion of the bill. Senator Parnell asked about regulations as to noise and where the machines could be ridden. Mr. Grasser said one of the discussions regarding the off-market products was tuned mufflers that could be put on the machine. However, outside of State parks he did not believe there were many regulations that applied to snow mobilers on public land in Alaska. Senator Donley asked the fee for the registration and Mr. Grasser indicated that the fee already set in Division of Motor Vehicles was in the amount of $10 on a bi-annual basis. He said there had been an amendment in Labor and Commerce, which allowed an individual the option to register the machine for more than a two-year period and up to six years if they so chose. That would be a $30 registration fee for six years. Senator Donley asked that Ms. Hensley be called before the committee. JUANITA HENSLEY, Director, Division of Motor Vehicles was invited to join the committee. Senator Donley asked her to explain the two, four, six-year option to register provision. Ms. Hensley indicated the division had no objection to the provision as requested by Senator Halford to be put into the bill. She said this was strictly an option the Legislature chose. Senator Donley asked if there would be any administrative problems and Ms. Hensley indicated there would be no more burden to register the machine under the provisions. She said there was a fiscal note attached to the bill in order to have one position to do the auditing and monitoring of the dealers that would be doing the point of sale registration for the division. Senator Donley asked for an explanation on the intent of the bill to capture federal funds for trails. Mr. Grasser said this was one of the main reasons for the bill. Senator Donley asked approximately how much money could be captured. Mr. Grasser said currently the National Recreational Trail Funds puts about $165,000 per year into the trails program. The requirement under federal law is that they depend on the number of machines registered rather than purchased. According to current figures there is approximately 70,000 snowmobiles in Alaska with about only 14,000 registered. Therefore approximately 60,000 machines were missing on the registered list which would be used towards the formula as set out by the federal government to send trail monies to Alaska. Senator Phillips asked if the Alaska Snow Machine Association endorsed the bill? Mr. Grasser indicated they did, along with several banks, private industries, the Anchorage Economic Development Corporation, along with several visitors' and convention bureaus. Senator Parnell informed the committee that it had been pointed out to him by the department that mufflers, throttles, brakes, lights and reflectors and other equipment was regulated by the State, along with city and municipality ordinances. He said there were plenty of regulations! Senator Adams MOVED SCS CS HB 231 (L&C) with individual recommendations and the accompanying fiscal note. WITHOUT OBJECTION it was REPORTED OUT with individual recommendations and accompanying fiscal note from the Department of Administration, Division of Motor Vehicles in the amount of $76.5. HOUSE JOINT RESOLUTION NO. 53 Relating to support for federal legislation providing for the continuation of the University of Alaska by the conveyance of federal land to the university. Co-chair Sharp called HJR 53. Senator Adams asked if the Co-chair was ready for a motion because the bill encouraged U.S. Senator Murkowski's land bill. Co-chair Sharp asked if there was any discussion needed and also re-iterated the bill would make good on some land transfers. Senator Parnell MOVED HJR 53 with individual recommendations. WITHOUT OBJECTION it was REPORTED OUT with individual recommendations. HOUSE BILL NO. 193 "An Act relating to financial assistance for students attending certain graduate education programs; and providing for an effective date." Co-chair Sharp called HB 193. He noted the bill had been before the committee previously. It would start requiring some payback under the medical schooling program unless the graduates returned to Alaska and practiced here. He indicated that amendment #1, proposed by Senator Pearce, was passed at that time. Senator Donley indicated he had no other amendments. He said the bill was a step forward even though it would not save any money for a long time. He felt it was the right thing to do as far as the students coming back to Alaska. The bill only required those returning students repay the tuition subsidy provided them. Senator Adams reiterated his concerns for the funding of the program. He also would like the funded students to return to Alaska, however, his concern was the money that was missing in the operating budget. Senator Donley pointed out that the bill did not require the individual to practice medicine in an area that was even needed in Alaska. He said Alaska had a shortage of physicians in certain areas and a surplus of physicians in other areas. While the WWAMI program is focused on providing types of practitioners that were needed, it was not mandatory those participants actually engage in that type of activity. He noted that if they really wanted to focus on the concern of Senator Adams they might consider an amendment requiring the nature of the practice be something the area or State needed. Senator Adams said at this time he would remove his objection but take another look at it in Rules. Senator Donley MOVED SCS HB 193(FIN) with individual recommendations and accompanying fiscal note. WITHOUT OBJECTION it was REPORTED OUT with individual recommendations and fiscal note from the Department of Education, Student Loan in the amount of $10.0. SENATE BILL NO. 192 "An Act relating to maintenance of state marine vessels; and providing for an effective date." Co-chair Sharp called SB 192. He said he would wait on this bill until Senators Torgerson and Taylor were available. Senator Adams asked permission to explain his amendment #1 so staff would have a chance to look at it. Co-chair Sharp had no objection. Senator Adams explained amendment #1. He said the bill related to the maintenance of the Alaska State Marine Highway vessels and providing for an effective date. He said his amendment would delete "...by the Alaska Marine Highway System..." and would read "...as determined under the criteria established under sections (d) and (e) that the proposed cost of maintenance and repairs be reasonable...". He said the main focus should be on maintenance of State vessels. The last item regarding the effective date was to delete "immediate effective date" and have it read "August 31, 1998" so they would have time to develop regulations if the bill were to pass. Co-chair Sharp said he would HOLD SB 192 in committee. Senator Pearce said the committee would take up the Department of Transportation budget at 4:30 p.m. Public hearing on the budget would begin tomorrow morning at 9:00 a.m. Senator Adams asked the schedule for amendments and Senator Pearce said the committee would take up any amendments on Friday. ADJOURNMENT Co-chair Sharp recessed the committee until 4:30 p.m. SFC-98 -14- 4/22/98
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