Legislature(2001 - 2002)
04/06/2001 10:05 AM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 06, 2001
10:05 AM
TAPES
SFC-01 # 70, Side A
CALL TO ORDER
Co-Chair Pete Kelly convened the meeting at approximately 10:05 AM.
PRESENT
Senator Dave Donley, Co-Chair
Senator Pete Kelly, Co-Chair
Senator Jerry Ward, Vice Chair
Senator Loren Leman
Senator Lyda Green
Senator Gary Wilken
Senator Alan Austerman
Senator Lyman Hoffman
Senator Donald Olson
Also Attending: SENATOR JOHN TORGERSON; REPRESENTATIVE JIM
WHITAKER; DAVID TEAL, Director, Division of Legislative Finance;
CHRIS CHRISTENSEN, Deputy Administrative Director, Alaska Court
System; LORI BACKUS, staff to Representative Whitaker
SUMMARY INFORMATION
HB 103-APPROP: OPERATING BUDGET/LOANS/FUNDS
HB 104-APPROP:MENTAL HEALTH BUDGET
The Committee rescinded its earlier actions in reporting the bills
from Committee. Committee substitutes were adopted and the bills
reported from Committee.
SB 172-COURT SYSTEM ANNUAL REPORT
The Committee adopted an amendment and reported the bill from
Committee.
HB 118-SR CIT./DISABLED VET. PROP TAX EXEMPTION
The Committee heard from the sponsor and reported the bill from
Committee.
SB 158-REPORT:STATE PARTICIPATE IN NAT GAS PIPE.
The Committee heard from the sponsor and reported the bill from
Committee.
CS FOR HOUSE BILL NO. 103(FIN)(brf sup maj fld)
"An Act making appropriations for the operating and loan
program expenses of state government, for certain programs,
and to capitalize funds; and providing for an effective date."
SENATE CS FOR CS FOR HOUSE BILL NO. 104(FIN)
"An Act making appropriations for the operating and capital
expenses of the state's integrated comprehensive mental health
program; 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."
Co-Chair Kelly announced that when these bills were reported from
the Committee at the previous hearing, sections were inadvertently
omitted.
Senator Hoffman requested confirmation from the Division of
Legislative Finance that the new committee substitutes incorporate
only the aforementioned omitted information.
Co-Chair Kelly assured this is the case; with the exception that
the amendments the Committee adopted are also incorporated.
DAVID TEAL, Director, Division of Legislative Finance, affirmed.
Co-Chair Donley moved to rescind the action of reporting SCS CS HB
103 (FIN), 22-LS0410\T from Committee.
There was no objection and the action to report the bill from
Committee was RESCINDED.
Co-Chair Donley moved to adopt SCS CS HB 103, 22-LS0410\W as a
working draft.
The committee substitute was ADOPTED without objection.
Co-Chair Donley moved to report SCS CS HB 103 (FIN), 22-LS0410\W
from Committee.
Without objection, SCS CS HB 103 (FIN), 22-LS0410\W MOVED from
Committee.
Co-Chair Donley moved to rescind the Committee's action of
reporting an incomplete SCS CS HB 104, (FIN) 22-LS0411\O from
Committee.
Co-Chair Donley moved to adopt the complete SCS CS HB 104 (FIN),
22-LS0411\O as a work draft. [Note: The omitted sections are
included in this version although the version number is unchanged.]
Senator Hoffman referenced the funding source on page 11, line 24;
CBR (Constitutional Budget Reserve) Mental Health fund and asked
for an explanation.
Mr. Teal responded this is a new fund code created by the Division
for tracking purposes. He likened it to the General Funds/Mental
Health fund, which is also used to keep track of the expenditure of
funds for mental health related expenses.
Senator Hoffman asked if the CBR Mental Health fund is essentially
a CBR fund.
Mr. Teal replied it is.
Senator Hoffman clarified this accounting fund code is new with
this budget.
Co-Chair Kelly affirmed.
The committee substitute, Version "O" was ADOPTED as a working
draft without objection.
Co-Chair Donley offered a motion to report SCS CS HB 104 (FIN), 22-
LS0411\O from Committee.
There was no objection and the bill MOVED from Committee.
SENATE BILL NO. 172
"An Act relating to an annual report by the court system to
the public and the legislature."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Donley spoke to this Senate Finance Committee sponsored
legislation. He stated it places into statute, a provision
requiring that the Alaska Court System prepare an annual report
following certain perimeters. He qualified the Court currently does
issue an annual report, and he referenced the latest version.
However, he warned that this report is not mandatory and the Alaska
Court System could decide to discontinue issuing it at any time.
Co-Chair Donley noted this legislation would stipulate the reports
include additional information relating to the "timeliness of
decisions being made by the Judicial Branch" as well as specific
information about travel expenses and per diem for judges and
justices. He stressed the travel and per diem accountability
provision is identical to that required of legislators and
employees of the Legislative and Executive Branches.
Co-Chair Donley surmised this information would provide the public
with "valuable different information in evaluating how well the
court system is actually performing and how individual justices and
judges and courts are performing."
Senator Green asked if similar legislation passed the prior
legislative session.
Co-Chair Donley emphasized the intent of this bill is not to change
the Alaska Court System current practice with regard to the
issuance of the annual report. He noted this legislation does
require the Court to provide a copy of the reports to the Senate
Secretary and the Chief Clerk of the House of Representatives as
well be made available to the public.
Senator Green remembered legislation passed a year before allows
reports to be disseminated electronically rather then by hard copy.
Co-Chair Donley remembered discussion on the matter, but was unsure
if specific legislation passed.
Senator Austerman understood most of the information stipulated in
this bill is already provided in the report.
Co-Chair Donley stressed the annual report issued by the Alaska
Court System already contains most of the information required in
this legislation. The only exceptions, in his opinion, is the
addition of information showing the average mean, minimum and
maximum periods of time between the disposition of cases and the
issuing of a ruling classified by courts and by each justice. He
noted the current reports contain general summaries for the entire
court system of the average length of time before a decision is
rendered, but the information is not broken down to show each court
or judge.
Co-Chair Donley continued that another exception would be a
requirement that the report include information identifying how
many times a judge or justice has failed to comply with the
"warrant statutes". These statutes, he explained pertain to the
withholding of pay when decisions are not issued before a specific
deadline.
Co-Chair Donley listed the final exception as the travel and per
diem information that would be required under the bill.
Senator Austerman asked why reporting of the travel expenses and
per diem expenditures for each judge and justice is necessary.
Co-Chair Donley replied it is for the same reason that the
legislative and executive branches report annually. He expressed
it is a "good accountability measure for government" and should be
made easily available to the public.
CHRIS CHRISTENSEN, Deputy Administrative Director, Alaska Court
System, testified that the Supreme Court has issued an annual
report since shortly after statehood. He noted for the record that
the report is not produced under a statutory mandate but rather as
part of the Supreme Court's constitutional authority to administer
the Judicial Branch. In essence, he stressed, this report is "the
Supreme Court's annual message on Judicial Branch operations."
Mr. Christensen asserted, "The legislature is the best judge of the
information that it finds useful to do its job." He noted the
legislature has the authority to instruct the Alaska Court System
to provide statistics and other information about court operations,
and he assured this information would be provided.
Mr. Christensen referenced the zero fiscal note, informing that the
reporting requirement would involve information already collected
or could be easily obtained using current resources.
Mr. Christensen clarified that the document referred to as the
annual report is the Supreme Court's Message and is "akin to the
report that you as individuals and as organizations send to
Alaskans describing your operations here in Juneau." He remarked,
"Much as you are the final authority of what goes into those
reports, we believe that the Supreme Court is the final authority
on what this particular document contains."
Mr. Christensen shared with the Committee that in correspondence
between Co-Chair Donley and Chief Justice Dana Fabe in January
2001, Chief Justice Fabe committed to Co-Chair Donley that she
would "raise this issue (of including the additional information in
the annual report) with her colleges." Mr. Christensen qualified
that this information may actually be included in a separate
report, issued to the legislature and available to the public as
required in SB 172.
Co-Chair Kelly asked if Co-Chair Donley objected to the removal of
"annual" before "report" in the bill.
Co-Chair Donley did not.
Mr. Christensen pointed out that much of the information is
calculated based on the fiscal year, rather then calendar year, due
to the manner in which the Alaska Court System is funded. He stated
that most of the information stipulated in the bill could be
provided on a fiscal year basis. However, he reminded of another
statute requiring the Alaska Court System provide travel and per
diem expenditure information in a calendar-year report, which has
been submitted to the legislature every January. He stated that it
has been difficult to obtain all the information before February,
especially for travel in rural areas of the state. Because of this,
he suggested the information could be provided on either a fiscal
year basis or a calendar basis if allowed an extra 45 - 60 days to
compile the information.
Co-Chair Donley commented, "It would be nice to keep it consistent
with the reports that we already do for the Executive and
Legislative Branches, which are by calendar year." Therefore, his
first choice was for additional time for a calendar report.
AT EASE 10:19AM/10:23AM
Amendment #1: This conceptual amendment deletes "February 1" in
inserts "March 15" on page 1, line 6, deletes "an annual" and
inserts "a" on line 7, and deletes "of" and inserts "regarding" on
line 8. The amended language in Section 1 reads as follows.
Sec. 22.20310. Court system annual report. The
administrative director shall, not later than March 15 of
each year, make available to the public and file with the
senate secretary and the chief clerk of the house of
representatives a report regarding the Alaska Court
System. The report must include…
Co-Chair Donley moved for adoption.
Without objection the amendment was ADOPTED.
Co-Chair Donley offered a motion to report SB 172, 22-LS0412\F, as
amended from Committee with a zero Alaska Court System fiscal note.
It was clarified that the changes made with the amendment are not
inconsistent with the title of the bill.
The bill MOVED from Committee without objection.
HOUSE BILL NO. 118
"An Act relating to a mandatory exemption from municipal taxes
on certain residences; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
REPRESENTATIVE JIM WHITAKER, sponsor, testified this bill allows
municipalities "deal with its local issues"; specifically tax
exemptions for senior citizen, disabled veterans, and widowers and
widows over the age of 60.
Senator Wilken told of his parent's current situation living in the
Fairbanks Pioneers' Home but maintaining their house and property
as their official residence. Meanwhile, he noted, the house is
being leased as rental property. He noted the bill does not require
annual affidavits showing proof of residency and asked if the
intent is for the taxpayers to subsidize property owned by the
elderly who no longer live in their homes.
Representative Whitaker answered it is potentially so. He
explained the intent is that each municipality would establish
procedures, which could preclude such subsidies. He stressed his
concern is to "not punish a significantly larger population of
seniors with an over burdensome obligation to apply every year in
consideration of those who might attempt to take advantage of the
situation."
Senator Wilken understood the current property tax statements
contain a straightforward notice informing that an exemption must
be filed every year and the statement even includes a detachable
affidavit for the homeowner to submit. He remarked the issue of
annual exemptions has not been a problem that he has been aware of
and he questioned whether this legislation would "open the door to
abuse" in anticipation of a problem that has not occurred.
Representative Whitaker replied that there actually has been a
situation in the Fairbanks North Star Borough involving Olive
Anderson, an elderly resident who was unable to comprehend that she
had to file on an annual basis. He stated that her taxes went
unpaid for several years and the Borough foreclosed on the
property. When he inquired as to how this could be averted, he was
told that state law is very specific and the Borough had no
alternative.
Representative Whitaker clarified this bill is not retroactive and
would not affect Ms. Anderson but would allow a municipality to
prevent a similar occurrence in the future.
Senator Wilken asked if the Fairbanks North Star Borough A ssembly
has indicated support for or against this legislation.
LORI BACKUS, staff to Representative Whitaker, indicated that
Representative Whitaker received a letter from Mayor Rhonda Boyles,
of the Fairbanks North Star Borough stating she had no objection to
the bill and expressed approval that the municipalities would be
given authority to establish an application procedure. Ms. Backus
relayed that the State Assessor has testified in previous hearings
on the bill that the Tax Division, Department of Revenue does not
object to the legislation and anticipates it would alleviate "some
of the yearly paperwork."
Senator Austerman offered a motion to report from Committee HB 118,
22-LS0138\J with zero fiscal note from the Department of Community
and Economic Development.
Without objection HB 118 MOVED from Committee.
CS FOR SENATE BILL NO. 158(RES)
"An Act directing the commissioner of revenue to prepare a
report to the legislature relating to the state's
participation in owning or financing a gas pipeline project;
and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
SENATOR JOHN TORGERSON, sponsor, relayed that in discussions
relating to the construction of a natural gas pipeline in Alaska,
the question has arisen as to whether the state should take an
active ownership role in all or part of the pipeline or whether to
offer other financial incentives. As a result of these discussions,
he stated, this bill directs the commissioner or the Department of
Revenue to prepare a report on this matter to the legislature by
January 31, 2002. He elaborated this report would include a
recommendation of whether the state should establish a state-owned
public corporation; an entity similar to a port authority for the
portion of the pipeline located in Alaska. If the recommendation is
for state ownership, he noted the report would include
recommendations on how it would be financed, either through general
obligation bonds, revenue bonds, guaranteed debt, etc. This
report, he continued, would also show the impact that ownership
would have on the state's revenue and the ability to provide
essential services and public services. In addition, the report
would contain information on how Alaskans could purchase shares of
the public corporation, if it were formed.
Senator Torgerson pointed out the bill allows the department to
enter into an agreement with a qualified, suitable firm to
undertake this project. This contract, he said, would be exempt
from the competitive bid requirements under legislative policy
because of the limited time involved.
Senator Torgerson stated the bill stipulates that the Department
would provide to the House Resources and Senate Resources
Committees, the data which the contractor would base its
recommendations. He noted the contractor would give status reports
to the Committees at least every 60 days.
Senator Leman referenced the fiscal note and asked if the sponsor
considered the $215,000 amount "reasonable".
Senator Torgerson replied a similar report was done in 1982 at the
approximately the same cost. Therefore, he surmised this amount is
not extra-ordinary.
Senator Wilken referenced the port authority between the North
Slope Borough, the Fairbanks North Star Borough and the City of
Valdez. He asked if this legislation would preclude the port
authority from participating in ownership of a natural gas
pipeline.
Senator Torgerson answered it would not, since this bill only
involves recommendations. He noted the port authority established
between the three communities only has taxing authority on
activities within in their boundaries, and much of the area a
pipeline would cross would not be included. He qualified that if
state-ownership were to occur, it was possible the port authority
could be excluded. However, he stressed, the matter is still being
debated with a large port authority discussed as one option.
AT EASE 10:36AM/10:37AM
Senator Wilken offered a motion to report CS SB 158 (RES) from
Committee with fiscal note #1 from the Department of Revenue.
There was no objection and CS SB 158 (RES) MOVED from Committee.
ADJOURNMENT
Co-Chair Pete Kelly adjourned the meeting at 10:41 AM
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