Legislature(1993 - 1994)

03/12/1994 10:05 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    SENATE FINANCE COMMITTEE                                   
                         March 12, 1994                                        
                           10:05 a.m.                                          
  SFC-94, #28, Side 2 (000-end)                                                
  SFC-94, #30, Side 1 (000-575)                                                
  SFC-94, #30, Side 2 (575-105)                                                
  CALL TO ORDER                                                                
  Co-chair Drue Pearce  convened the meeting  at approximately                 
  10:05 a.m.                                                                   
  In addition to  Co-chairs Pearce and Frank,  Senators Jacko,                 
  Kerttula, and Sharp were present.  Senators Kelly and Rieger                 
  arrived soon after the meeting began.                                        
  ALSO ATTENDING:   Senator Randy Phillips; Representative Pat                 
  Carney; Dean  Guaneli, Assistant Attorney  General, Criminal                 
  Division,  Dept. of  Law;  Albert  Alvarez, Vice  President,                 
  University  Relations,  Alaska  Pacific   University;  Larry                 
  Meyers, Director, Income  and Excise Tax Division,  Dept. of                 
  Revenue;  John  Talley,   Financial  Examiner,  Division  of                 
  Insurance, Dept. of Commerce and Economic Development; Keith                 
  Kelton, Director,  Division  of  Facility  Construction  and                 
  Operation,  Dept.  of  Environmental  Conservation;  Crystal                 
  Smith,  Alaska  Municipal  League;  Reed  Stoops,  Lobbyist,                 
  Alaska Air Carriers Association; Shirley Armstrong, aide  to                 
  Senator  Randy  Phillips;  Carol Carroll,  aide  to  Senator                 
  Kerttula; Terry Ottness,  aide to Senator Taylor;  and aides                 
  to committee members and other members of the legislature.                   
  ALSO PARTICIPATING VIA TELECONFERENCE:                                       
  Patrick Wilson, Chairman, Canned Salmon Classic   -                          
  Harold Jones, City Council Member                 -                          
  Carrie Williams, City Manager, St. Mary's         -                          
  Tim Troll, City Administrator/City Attorney                                  
             Sand Point, Alaska                     -                          
  SUMMARY INFORMATION                                                          
  SB  26 -  LEGISLATIVE SESSIONS TO BE IN ANCHORAGE                            
            Testimony was presented by Senator Randy  Phillips                 
            and his  aide, Shirley  Armstrong.   The bill  was                 
            REPORTED OUT of  committee without  recommendation                 
            and subsequently accompanied by an updated  packet                 
            of 19 fiscal notes.                                                
  SB 225 -  INSURANCE TAX CREDIT:GIFTS TO COLLEGES                             
            Testimony was  presented by  Albert Alvarez,  John                 
            Tally,  and   Carol  Carroll,   aide  to   Senator                 
            Kerttula.  CSSB 255 (HES) was then REPORTED OUT of                 
            committee with a "do  pass" recommendation, a zero                 
            fiscal  note  from  the Dept.  of  Revenue,  and a                 
            fiscal  note  from  the   Dept.  of  Commerce  and                 
            Economic Development showing  a revenue  reduction                 
            of ($900.0)                                                        
  SB 251 -  COMM'L FISH LOANS FOR CERTAIN OBLIGATIONS                          
            Amendment No. 1 by Senator Kelly was presented and                 
            adopted.  CSSB  251 (Fin) was then REPORTED OUT of                 
            committee    with    individual    recommendations                 
            accompanied by a  zero fiscal note from  the Dept.                 
            of Commerce and Economic Development.                              
  SB 261 -  NO MUNICIPAL SALES TAXES ON AIR CARRIERS                           
            Teleconference  testimony  was provided  by Harold                 
            Jones, Carrie  Williams,  and  Tim  Troll  and  by                 
            Crystal Smith, Larry  Meyers, and  Reed Stoops  in                 
            Juneau.  CSSB   261  (Fin)  was  REPORTED  OUT  of                 
            committee without  recommendation, accompanied  by                 
            zero fiscal notes from the  Dept. of Community and                 
            Regional Affairs  and Dept. of  Transportation and                 
            Public Facilities  as well  as a  municipal fiscal                 
            note  from  the Dept.  of  Community and  Regional                 
            Affairs indicating minimal revenue loss.                           
  SB 276 -  CRIMINAL JUSTICE INFORMATION                                       
            Discussion was  had with  Dean Guaneli.   A  draft                 
            CSSB  276  (Fin),  K version,  was  presented  and                 
            adopted.  Amendments No. 1 and No. 2, presented by                 
            the Dept. of Law, were also adopted.  The bill was                 
            subsequently   HELD   in  committee   pending  the                 
            drafting of language permitting legislative access                 
            to criminal justice information.                                   
  SB 294 -  PETERSBURG CANNED SALMON CLASSIC                                   
            Teleconference testimony was  provided by  Patrick                 
            Wilson from  Petersburg.   Terry Ottness, aide  to                 
            Senator Taylor, also spoke to  the bill.  The bill                 
            was REPORTED  OUT of  committee with  a "do  pass"                 
            recommendation  and a  zero  fiscal note  from the                 
            Dept. of Revenue.                                                  
  SB 330 -  WATER QUALITY FUNDS AND GRANTS                                     
            Testimony   was   presented   by   Keith   Kelton.                 
            Amendment No.  3, proposed by Senator  Rieger, was                 
            adopted.  CSSB 330 (Fin)  was then REPORTED OUT of                 
            committee with a  "do pass"  recommendation and  a                 
            zero  fiscal  note  from  Dept.  of  Environmental                 
  SB 360 -  APPROP: AMEND FY 94 PUBLIC ASSISTANCE                              
            Draft legislation was approved for introduction as                 
            Senate Finance  Committee  legislation.    It  was                 
            subsequently numbered SB 360.                                      
  SB 225 INSURANCE TAX CREDIT:GIFTS TO COLLEGES                                
       An Act relating  to credits  against certain  insurance                 
       taxes   for   contributions   to  certain   educational                 
       institutions; and providing for an effective date.                      
  Co-chair  Pearce  directed that  SB  225 be  brought  on for                 
  discussion  and   referenced  the   Senate  HESS   Committee                 
  Substitute for the  bill.  Senator Kerttula, sponsor  of the                 
  legislation,  noted  that  private   institutions  statewide                 
  relieve a substantial  taxpayer burden.   He explained  that                 
  the proposed bill would extend tax credits for contributions                 
  to  private  educational   institutions  to  the   insurance                 
  CAROL CARROLL, aide to Senator  Kerttula, reiterated that SB
  225  would extend an existing tax  credit to title companies                 
  and  insurance companies.   Those entities were  left out of                 
  prior legislation providing  for the credit because  they do                 
  not  pay corporate income tax.  They  do, however, pay a tax                 
  on  their  premiums.    Since  tax  provisions  relating  to                 
  premiums were not  amended when  tax credit legislation  was                 
  passed, insurance companies  are unable to  avail themselves                 
  of the credit.  SB 225 would allow them to do so.  It limits                 
  the credit to 50% of the first $100.0 and 100% of the second                 
  $100.0.  Credit  is further limited to 50% if  the total tax                 
  liability  is  less than  $150.0.    In 1993,  the  Dept. of                 
  Revenue  provided  $533.0  in  tax  credits  to   qualifying                 
  corporations that donated to educational institutions.                       
  AL  ALVAREZ,  Vice President,  University  Relations, Alaska                 
  Pacific University, came before committee urging support for                 
  the  bill.    He reiterated  that  insurance  companies were                 
  inadvertently not included  in earlier legislation  allowing                 
  for the tax credit  because they pay taxes under  a separate                 
  section  of the  tax code.   The  tax credit has  provided a                 
  significant  amount  toward  long-term  financial health  of                 
  Alaska Pacific.   Added revenue from the  insurance industry                 
  would be most beneficial.                                                    
  Senator  Kelly  asked  how  receipts  from tax  credits  are                 
  budgeted by the University of Alaska.  Co-chair Frank voiced                 
  his understanding they would be included in the budget under                 
  "other . . . receipts."                                                      
  Discussion  of   donations  to  the  University   of  Alaska                 
  followed.   Carol Carroll referenced  a University  position                 
  paper indicating that  the University  raised "close to  $12                 
  million over the past two years."                                            
  Senator  Kerttula  attested to  differences  in the  cost of                 
  course offerings between the University and  Alaska Pacific,                 
  and spoke to need for continued private sector comparison as                 
  a means of measuring University of Alaska performance.                       
  In response  to a question  from Senator Kelly,  Mr. Alvarez                 
  advised that Alaska Pacific received  "close to $900.0" from                 
  existing  tax  credits.   He  further advised  that momentum                 
  generated  by  the credit  creates  a springboard  for other                 
  Senator Sharp asked how  many non-profit, public/private two                 
  or four-year accredited schools in  Alaska would qualify for                 
  the  credit,  besides  the  University and  Alaska  Pacific.                 
  Senator  Kerttula  noted  Sheldon Jackson.    The  credit is                 
  presently limited to those three institutions.                               
  Co-chair   Frank   inquired   concerning   the   number   of                 
  corporations receiving the  credit.  Mr. Alvarez  advised of                 
  five gifts--three from the  oil industry and two  from other                 
  sources.  Alaska Pacific has twice that number  of prospects                 
  in terms of companies that are "ready to give."                              
  LARRY  MEYERS, Director,  Income  and  Excise Tax  Division,                 
  Dept.  of  Revenue, next  came  before committee.   Co-chair                 
  Frank renewed  questions concerning  the number of taxpayers                 
  involved in the credit.   Mr. Meyers explained that,  for FY                 
  93, the  department received $142  million from oil  and gas                 
  corporations  and  other potentially  eligible corporations.                 
  When oil and  gas tax  payments are deducted,  approximately                 
  $25 million remains.   He said  he would provide figures  on                 
  corporate involvement.                                                       
  Senator Sharp  voiced  concern  that  should  an  individual                 
  income tax be reinstated in the future, individuals will  be                 
  treated much differently  than corporations in terms  of tax                 
  credits for gifts to educational institutions.                               
  JOHN TALLY, Financial Examiner, Division of Insurance, Dept.                 
  of Commerce  and Economic  Development, briefly  came before                 
  committee.    He  explained that  1,200  to  1,400 insurance                 
  companies pay premium taxes.   Co-chair Frank pointed to the                 
  ($900.0)  fiscal  note from  the  department and  voiced his                 
  understanding that if universities are aggressive in seeking                 
  contributions, the note could be  substantially higher.  Mr.                 
  Tally concurred.  Co-chair Frank  asked for  a breakdown  of                 
  premium tax payments made by insurance companies.  He voiced                 
  support for Universities  but noted  need to understand  the                 
  potential  for draining the  treasury.  Mr.  Tally agreed to                 
  provide the information.                                                     
  Senator   Sharp   inquired   regarding   expenditures   from                 
  foundations.  Co-chair  Frank voiced his  understanding that                 
  moneys  expended  by  the University  of  Alaska  would flow                 
  through the budget process.  Senator Kelly stressed need for                 
  accountability of those moneys.   Co-chair Frank attested to                 
  his  understanding that  the earlier  mentioned $12  million                 
  went into  a  fund,  and  only  the  interest  therefrom  is                 
  expendable.     Co-chair  Pearce   asked  if   contributions                 
  resulting  in tax  credits  are required  to  accrue to  the                 
  University of Alaska foundation.   Both Senator Kerttula and                 
  Carol  Carroll   advised  that  they  did  not   know.    No                 
  representatives of the  University were present to  speak to                 
  the issue.   Senator Kelly again  stressed need to know  how                 
  the money is accounted for by the University.                                
  Senator  Kerttula  MOVED  that  CSSB  225 (HESS)  pass  from                 
  committee with individual recommendations.   He told members                 
  he would procure the information sought by Senator Kelly and                 
  provide it  prior to  floor action  on the  bill.   Co-chair                 
  Frank pointed  to the  University position  paper indicating                 
  that the majority of the funds would accrue to endowments to                 
  provide  benefits to  student  "far into  the  future."   No                 
  objection having been  raised, CSSB 225 (HESS)  was REPORTED                 
  OUT  of committee with a zero  fiscal note from the Dept. of                 
  Revenue and a note  from the Dept. of Commerce  and Economic                 
  Development showing  revenue  reductions of  ($900.0).   Co-                 
  chairs Pearce and  Frank and  Senators Kelly, Kerttula,  and                 
  Rieger  signed  the  committee  report   with  a  "do  pass"                 
  recommendation.  Senators Jacko and Sharp signed "no rec."                   
  SENATE BILL NO. 26                                                           
       An Act relating to the location of the convening of the                 
       legislature in  regular session;  and providing  for an                 
       effective date.                                                         
  Co-chair  Pearce  directed  that SB  26  be  brought  on for                 
  discussion and  further  directed attention  to  packets  of                 
  fiscal notes which she indicated were  drafted by staff from                 
  the  sponsor's office  in  conjunction with  Senate  Finance                 
  Committee staff.                                                             
  SENATOR RANDY  PHILLIPS,  sponsor of  the legislation,  came                 
  before  committee.   He  explained  that fiscal  notes total                 
  approximately $500.0 for state agencies and $3.4 million for                 
  the  legislature for  the first  year.  Over  the succeeding                 
  five years,  those notes  decrease.   Senator Phillips  said                 
  that  in  preparing  agency  fiscal  notes,  he  asked  each                 
  department how  much was spent  during the 1993  session for                 
  travel  out of town.  That provides a comparison of how much                 
  traveling is done  while the legislature  is in Juneau.   He                 
  then  suggested that  if  the legislature  were  to move  to                 
  Anchorage,  fiscal notes  originally  submitted by  agencies                 
  would be reduced.                                                            
  Senator Phillips explained that the bill would move only the                 
  legislature from Juneau "closer to home for all of us around                 
  this table . . . , in Anchorage."                                            
  Senator Phillips further  pointed to  need to review  travel                 
  amounts for all  state agencies.   He noted that the  actual                 
  for  FY 93 was  "almost $39 million."   Travel for  FY 94 is                 
  authorized at $44.5 million.  He  suggested that too much is                 
  spent  on  travel  in  light  of  the  state's  audio-visual                 
  teleconference  system.   Questions arose  regarding figures                 
  set forth for  both DOTPF and  University travel.   Co-chair                 
  Frank suggested that if travel costs  were examined on a per                 
  employee bases, the  legislature might not "look so  good by                 
  comparison."   Co-chair Pearce concurred.                                    
  Co-chair Pearce  requested a  breakdown of  the $3.4  fiscal                 
  note  for  the  legislature.    SHIRLEY ARMSTRONG,  aide  to                 
  Senator  Phillips,  came  before  committee.    She directed                 
  attention to the original $4.8 million note from Legislative                 
  Affairs.  In  preparing the reduced  note, $680.4 in  moving                 
  expenses  for staff  was  deleted as  was  $1.4 million  for                 
  renovating the  existing capitol  building for occupancy  by                 
  other agencies.  The savings  accruing from consolidation of                 
  leases was  not used  as an  offset because  the legislature                 
  does  not, at this  time, know  whether agencies  would move                 
  into the existing capitol building if it is not renovated to                 
  suit  their  purposes.     Fiscal  note  costs  for  a   new                 
  communications  system  and lease  costs  for a  building in                 
  Anchorage appear to be reasonable.   The largest cost is the                 
  Anchorage  lease.    Senator  Kerttula  remarked   that  the                 
  legislature should own  its own building  if it is to  move.                 
  Senator Phillips advised there would  be no problem "getting                 
  somebody to build a building for the legislature."                           
  Co-chair Pearce called for additional testimony on the bill.                 
  None was forthcoming.   Senator Jacko MOVED that SB  26 pass                 
  from committee with  individual recommendations.  SB  26 was                 
  REPORTED  OUT  of  committee.    Senator  Sharp  signed  the                 
  committee report with a "do  pass" recommendation.  Co-chair                 
  Frank and Senators Jacko, Kelly, and Rieger signed "no rec."                 
  Senator Kerttula signed  "No rec., Needs amend  to Wasilla."                 
  Co-chair Pearce did not sign.                                                
  NOTE - Although the bill was  reported out of committee this                 
  date  and transmitted  to Rules,  accompanying fiscal  notes                 
  were not released until March 30, 1994.  The following notes                 
  were then attached:                                                          
       Gov. (All)                    $  173.7                                  
       Gov. (Ex.Office)              $   76.6                                  
       Gov. (OMB)                        97.1                                  
       DOA                               37.4                                  
       DC&ED                             28.4                                  
       DC&RA                              9.9                                  
       DOC                                  0                                  
       DEC                               18.0                                  
       DOE                               25.9                                  
       DF&G                              17.3                                  
       DH&SS                             52.0                                  
       DOLabor                           10.1                                  
       DOLaw                             13.0                                  
       DMVA                               8.2                                  
       DPS                               23.6                                  
       DOR                               25.9                                  
       DOTPF                             28.4                                  
       LAA                           $3,398.0                                  
  SENATE BILL NO. 330                                                          
       An  Act relating  to  water quality  enhancement, water                 
       supply, wastewater, and solid  waste grants; the Alaska                 
       clean water fund; the establishment of the Alaska clean                 
       water account, the Alaska drinking  water fund, and the                 
       Alaska  drinking water  account; and  providing  for an                 
       effective date.                                                         
  Co-chair Pearce  directed  that SB  330  be brought  on  for                 
  discussion  and  referenced the  zero  fiscal note  from the                 
  Dept.  of Environmental  Conservation,  a sponsor  statement                 
  from Senator Halford,  a sectional analysis, and  letters of                 
  support  from  the   City  of  Hoonah   and  the  Dept.   of                 
  Environmental  Conservation.  She  further observed that the                 
  bill was introduced at the request of the department.                        
  KEITH KELTON,  Director, Division  of Facility  Construction                 
  and  Operation, Dept.  of  Environmental Conservation,  came                 
  before committee.                                                            
  End:      SFC-94, #28, Side 2                                                
  Begin:    SFC-94, #30, Side 1                                                
  He explained that the bill amends two statutes:  one relates                 
  to  grants  and the  other to  loans.   Changes  to matching                 
  grants are included in the first  five sections of the bill.                 
  The program  currently provides assistance  for construction                 
  of  water  and  sewage  treatment  plants  and  solid  waste                 
  facilities for  incorporated communities.   First  class and                 
  larger  communities have typically availed themselves of the                 
  program.  Proposed amendments would:                                         
       1.   Make   it   easier   for    smaller   incorporated                 
            to receive assistance.                                             
       2.   Clean up archaic provisions in statutes enacted in                 
            1972 and amended many times hence.                                 
  As  originally  drafted,  the matching  grants  program  was                 
  intended to match  a federal grant  program from EPA.   That                 
  program  is  no  longer  available.    The  federal  program                 
  provided 75% funding.  Statutes required that the balance be                 
  spilt 50/50 between state and local governments.   Since the                 
  federal program no longer exists, there is no reason for the                 
  statutory provisions.   The department  has found, over  the                 
  past  several   years,  that   the  50/50   requirement  led                 
  communities to seek total state funding rather than applying                 
  for  federal   dollars.    The  proposed   statutory  change                 
  eliminates  the  federal clause  and  allows communities  to                 
  match as much state money with as much federal money as they                 
  can acquire.  There would thus  be no disincentive to obtain                 
  federal dollars.                                                             
  Mr.   Kelton  explained   that   smaller  communities   with                 
  populations of 1,000 to 5,000 have not availed themselves of                 
  the program,  although many  have  "real sanitation  needs."                 
  For communities below 1,000, the  village safe water program                 
  provides funding,  and communities with  populations greater                 
  than 5,000  generally do  not have  problems with the  local                 
  match.  Communities that fall  within those ranges have been                 
  unable  to  finance  facilities.    The department  is  thus                 
  proposing a change in funding  relationships to more closely                 
  parallel the Governor's matching grants program.  Instead of                 
  50%  state  participation,  the  level   would  be  85%  for                 
  communities  of   1,000  and  30%  state  participation  for                 
  communities between 1,000  and 5,000.  For  communities over                 
  5,000, the status quo is maintained.                                         
  Changes to loan statutes, involve an addition to the current                 
  program.    Present statutes  allow  the department  to take                 
  advantage of an EPA loan program which is 85% capitalized by                 
  the  federal  government.   These  loans are  for wastewater                 
  facilities only, and a fund  of approximately $60 million is                 
  available for capitalization.   Three bills, now  pending in                 
  Congress, would  establish a parallel  program for  drinking                 
  water.  Through changes in the proposed bill, the department                 
  is  attempting  to   "get  ahead  of  the   federal  program                 
  authorization . .  . ."  The bill seeks to establish a state                 
  loan  program  so  that when  the  federal  authorization is                 
  available, the department  will be  able to utilize  federal                 
  moneys.   Mr. Kelton  described the  importance of  drinking                 
  water loans in relation to  federal requirements for surface                 
  water treatment.   Federal  law requires  all surface  water                 
  sources to receive filtration.  Due to that law, a number of                 
  "very expensive treatment systems" are required.  Localities                 
  (Unalaska, Kodiak, and Cordova were cited as examples) where                 
  seafood   processors  use   surface   water  will   incur  a                 
  "tremendous cost."   The proposed loan program  will provide                 
  communities low interest loans, at 2/3 of the municipal bond                 
  index (about 4%), capitalized 80% by the federal government.                 
  Senator Rieger directed attention to  existing law set forth                 
  at page  3, line  16, of  the bill  and referenced  language                 
  allowing use  of the  clean water  fund for "guaranteeing  a                 
  public  agency debt  obligation."   He then  voiced need  to                 
  substitute other wording for "guaranteeing"  to more clearly                 
  indicate that clean water assets may be used as security for                 
  debt obligation.   The Senator voiced concern  that existing                 
  language might infer an obligation of the state.  Mr. Kelton                 
  advised that while  the language  has been  in effect  since                 
  1987 and no problems have arisen, he would have no objection                 
  to a change.   Senator Rieger then MOVED for adoption of the                 
  following amendment:                                                         
       Page 3, Line 16:     delete "guaranteeing or"                           
                            insert "collateral or for"                         
  Co-chair Pearce  called for  a show  of hands.   The  motion                 
  CARRIED unanimously, and the amendment was ADOPTED.                          
  Senator Sharp asked how the proposed new drinking water fund                 
  would interplay with  the existing clean water program.  Mr.                 
  Kelton explained that  there is  no correlation between  the                 
  first five sections of the bill (relating to grants) and the                 
  new loan program in remaining bill  provisions.  There is no                 
  interplay between the two; one does  not provide a match for                 
  the other.                                                                   
  Co-chair   Pearce  called   for   additional  testimony   or                 
  discussion.  None was forthcoming.                                           
  Senator  Kerttula  MOVED  that  CSSB  330  (Fin)  pass  from                 
  committee  with individual  recommendations.   No  objection                 
  having  been  raised, CSSB  330  (Fin) was  REPORTED  OUT of                 
  committee  with  a  zero  fiscal  note  from  the  Dept.  of                 
  Environmental   Conservation.     All  members   signed  the                 
  committee report with  a "do  pass" recommendation with  the                 
  exception of Senator Kelly who was absent from the meeting.                  
  SENATE BILL NO. 294                                                          
       An  Act   relating  to  canned  salmon   classics;  and                 
       providing for an effective date.                                        
  TERRY  OTTNESS,   aide  to   Senator  Taylor,  came   before                 
  committee.  He explained that the legislation was introduced                 
  at the request of the Petersburg  Chamber of Commerce.  Last                 
  year,  the  chamber  implemented  a  canned  salmon  classic                 
  whereby  the person who  most closely guessed  the number of                 
  cases of salmon packed by Petersburg canneries won a  prize.                 
  Receipts   from   the  classic   fund  the   prize,  chamber                 
  operations, and  a student scholarship.  Current regulations                 
  establish  a  50-cent  per-ticket  limit  for  special  draw                 
  raffles.     The  proposed  legislation  would   permit  the                 
  Petersburg Chamber of Commerce to raise the ticket price for                 
  the canned salmon classic to $2.00, and allow the classic to                 
  join other state-sanctioned lotteries such as the Nenana Ice                 
  Classic.  Tickets would be  sold throughout Southeast.   The                 
  proposal is  supported by other Southeast Alaska communities                 
  and the Alaska Trollers' Association.                                        
  PATRICK  WILSON,  Chairman,  Canned   Salmon  Classic,  next                 
  testified via teleconference from  Petersburg.  He explained                 
  that the  classic  is intended  to  focus attention  on  the                 
  community of Petersburg  and raise moneys for  promotion and                 
  scholarships.  The classic was successful in its first year.                 
  The  plan  for  this  year  is  to  expand  into  ten  other                 
  communities.  The City of Petersburg has received permission                 
  from those communities  to do so.   An October seafood  fest                 
  was organized  in conjunction with  the classic, and  300 to                 
  400   people  participated.     Local  canneries   are  very                 
  supportive of the classic which has focused awareness on the                 
  seafood industry.   The  Alaska Seafood Marketing  Institute                 
  was helpful in providing pamphlets and brochures, containing                 
  recipes, for public distribution.                                            
  Co-chair Pearce called for additional testimony on the bill.                 
  None was forthcoming.                                                        
  Senator Kerttula MOVED for passage of SB 294 with individual                 
  recommendations.  No  objection having  been raised, SB  294                 
  was REPORTED OUT of  committee with a zero fiscal  note from                 
  the  Dept. of  Revenue.   All members  signed  the committee                 
  report with a "do pass" recommendation with the exception of                 
  Senator Jacko who  was absent from  the meeting and did  not                 
  SENATE BILL NO. 261                                                          
       An  Act  relating  to  municipal  sales and  use  taxes                 
       involving air carriers; and providing for  an effective                 
  Co-chair  Pearce directed  that  SB 261  be  brought on  for                 
  discussion  and referenced the Senate Community and Regional                 
  Affairs  Committee  Substitute;  sponsor  statement;  fiscal                 
  notes; opposition papers from  the Alaska Municipal  League,                 
  Haines Borough, and City of St.  Mary's; a position paper by                 
  the air  carriers in  support of  the bill; and  information                 
  from both the FAA and U.S. Dept. of Transportation.  The Co-                 
  chair further directed  attention to a work  draft committee                 
  substitute (8-LS156\R, Cook,  3/11/94), proposed by  Senator                 
  Sharp, as well as a proposed letter of intent.                               
  Senator  Sharp  MOVED for  adoption of  CSSB 261  (Fin), "R"                 
  version, for discussion purposes.   No objection having been                 
  raised, the "R" version of CSSB 261 (Fin) was ADOPTED.                       
  Senator Sharp  explained that CSSB  261 (Fin) adds  the word                 
  "air" before  transportation in  title language  at page  1,                 
  line 1, and  within the body of  the bill at line 10.   That                 
  ensures that  the legislation  addresses air  transportation                 
  rather  than auxiliary  transportation  provided  by an  air                 
  carrier on the  ground. The new  draft also adds  subsection                 
  (b) to the previously included (e) under 49 U.S.C. App 1513.                 
  That section reassures  that municipalities may  continue to                 
  charge property taxes,  income taxes,  franchise taxes,  and                 
  sales and  use taxes  on the  sale of  associated goods  and                 
  services provided  by air  carriers.   It further  reassures                 
  that  the   right  of  municipalities  or   other  political                 
  subdivisions that own or operate airports to levy or collect                 
  reasonable rental  charges, landing  fees, or  other service                 
  charges from aircraft operators is not infringed upon.                       
  The Senator spoke to past efforts to tax passenger fares and                 
  freight  in  intrastate  commerce.   The  intent  of federal                 
  legislation, as evidenced  in recent court rulings,  is that                 
  that is not allowable.  The proposed  bill clarifies federal                 
  Senator  Sharp  further noted  deletion  of  the retroactive                 
  clause from previous versions  of the bill and  advised that                 
  CSSB 261 (Fin) would become effective immediately.                           
  Senator Kelly referenced information from the Haines Borough                 
  indicating  that  the   borough  applies  a  sales   tax  on                 
  intrastate freight.  He then asked  if the bill would impact                 
  ability  to  continue to  collect  the tax.    Senator Sharp                 
  concurred that it would.  He  reiterated that the purpose of                 
  federal legislation is to ensure  that regional areas do not                 
  add  costs  within  their  particular  area  that  would  be                 
  transferred  outside  the  region in  terms  of  freight and                 
  passenger service.  Senator Kelly pointed to language within                 
  the position paper stating that the FAA Act of 1958 does not                 
  prohibit  municipalities  from  assessing  the  sales   tax.                 
  Senator  Sharp  advised  that  federal  law  is clear.    He                 
  suggested  that if  the Haines sale  tax is  challenged, the                 
  borough might face return  of tax moneys.   Such a tax  tips                 
  the  economic  balance of  shipping  freight and  passengers                 
  between locales on federally certificated airlines.  Senator                 
  Kelly voiced discomfort  over "stripping"  the tax from  the                 
  CRYSTAL  SMITH,   Alaska  Municipal   League,  came   before                 
  committee in opposition to the  bill.  She refuted  comments                 
  that  the  bill merely  clarifies  federal law.   Statements                 
  embodied  in  correspondence  from  general  counsel,   U.S.                 
  Department  of Transportation,  and  court rulings  indicate                 
  that  the  proposed  bill would  go  beyond  federal law  in                 
  prohibiting municipalities from  levying a sales tax  on the                 
  carriage  of  freight.    Ms.  Smith directed  attention  to                 
  language within the League position paper and noted comments                 
  by Alaska Superior Court Judge Jonathan M. Link in Homer Air                 
  vs. Kenai Peninsula Borough et  al.  The preliminary  ruling                 
  indicates that Section 1513 of the Federal Aviation Act does                 
  not prohibit  sales tax  on the  transportation of  freight.                 
  Ms.   Smith  noted   instances  where   municipalities  have                 
  attempted to impose such a tax and were told by air carriers                 
  that  the  tax  was contrary  to  federal  law.   Given  the                 
  financial resources of  a small municipality versus  the air                 
  carriers,  the  municipalities have,  in most  cases, backed                 
  down.  However, the Haines Borough is successfully levying a                 
  tax, based on opinions from  city attorneys, per information                 
  from the FAA, that the tax is allowed under federal law.                     
  The situation at St. Mary's whereby  the city seeks to place                 
  a  sales  tax on  shipments of  raw  fish through  the local                 
  airport brought this  issue to the  fore.  Air carriers  are                 
  fighting the tax which would provide approximately $100.0 in                 
  revenue to the city.  The city is presently negotiating with                 
  air carriers.  Passage of the proposed bill would render the                 
  issue moot.                                                                  
  Ms. Smith reiterated  opposition to  the bill, advised  that                 
  issues surrounding freight are not clear, and requested that                 
  the matter remain open.  She  acknowledged that fiscal notes                 
  evidence little impact.  The proposed bill involves  "one of                 
  those prospective things where you're  cutting off an option                 
  for municipalities to impose  a tax that might help  them in                 
  times of other declining resource situations."                               
  Senator Sharp asked if information from the Alaska Municipal                 
  League was made  known to  House members furthering  similar                 
  legislation.  He also asked  that he be provided information                 
  from the FAA (evidencing  that the Haines tax is  legal) and                 
  inquired concerning how  much revenue had been  collected up                 
  to this time.  Ms. Smith  explained that she spoke with  the                 
  city clerk and  treasurer prior to consideration of the bill                 
  in the  House.  She  acknowledged that she did  not, at that                 
  time, have anything in writing from the Haines Borough.  She                 
  further referenced correspondence  from the FAA to  the City                 
  of Yakutat and from the U.S. Department of Transportation to                 
  counsel for a number of small municipalities indicating that                 
  "taxes  on  the  intrastate  air  carriage of  property  are                 
  Senator  Rieger  asked if  all  commercial air  carriers are                 
  federally  certificated.      Senator   Sharp   voiced   his                 
  understanding  that federal  law  applies  to all  federally                 
  certificated  airlines   and  those   operating  under   FAA                 
  regulations.    That  would include  "everybody  that  has a                 
  commercial license."                                                         
  HAROLD  JONES,  City  Council  Member,  next  testified  via                 
  teleconference from  Bethel.   He voiced  opposition to  the                 
  bill and  support  for  the position  taken  by  the  Alaska                 
  Municipal League.  Bethel is  considering an ordinance for a                 
  use tax on alcohol.  Air freight is the only means  by which                 
  alcohol, sold in  Anchorage and  elsewhere, is brought  into                 
  Bethel.  While the  tax will be upon the consumer,  the city                 
  is  reviewing  the  possibility of  having  the  air carrier                 
  collect the tax for remission to the city.                                   
  Bethel spends  approximately  $1.4  million  on  its  police                 
  department each year.  The town  of 5,000 is the hub village                 
  for 25,000 people.  The tax base consists of a 5% sales tax.                 
  The proposed use tax would help offset some of the losses in                 
  revenue from the state.  The city is looking specifically at                 
  a  use  tax on  alcohol  because  it is  the  cause of  many                 
  problems.    Since the  airlines  are bringing  alcohol into                 
  Bethel, it seems  logical to  have them collect  the tax  on                 
  those who ship it.                                                           
  Senator  Rieger asked if the  city assesses dockage fees for                 
  water transportation into  Bethel.   Mr. Jones advised  that                 
  the  port is  a  state facility.   He  added  that the  city                 
  imposes wharfage and dockage fees.  Senator Rieger suggested                 
  that a similar fee be levied at the airport.  Mr. Jones said                 
  the city intends to tax the product rather than the freight.                 
  There  is  concern  that  the  proposed  bill  will  prevent                 
  collection of the  use tax.  Mr. Jones noted  that the state                 
  has "complete jurisdiction  over our  airport;" the city  is                 
  not involved.                                                                
  Senator Sharp voiced  concern over  selective taxation of  a                 
  particular  commodity.   He  then  asked what  would prevent                 
  other  communities from  levying  a  similar  tax.    As  an                 
  example, he asked what would  happen should Anchorage levy a                 
  5% sales tax on  all freight leaving the municipality.   The                 
  prime purpose  of the  bill is  to prevent  one region  from                 
  jeopardizing  the economic  shipment of  freight to  another                 
  region within  the state  or between  states.   That is  the                 
  thrust of federal legislation.                                               
  CARRIE WILLIAMS,  former City  Manager of  St. Mary's,  next                 
  spoke via teleconference from Anchorage.  She voiced concern                 
  over  lost  revenues  to  bush  communities  resulting  from                 
  prohibiting sales and  use taxes.  Speaking  specifically on                 
  behalf of St. Mary's, Ms. Williams noted past receipt of raw                 
  fish taxes from fisheries in the  area.  Those revenues have                 
  now  been  lost.   Rural  communities have  had  to maintain                 
  police departments and roads and have nominal revenues.  St.                 
  Mary's has a  $2.5 million budget.   Loss of ability to  tax                 
  freight service on the 5,200 tons of raw fish shipped out of                 
  the community would total $88.0.  The contention is that use                 
  of  the  airport for  shipment  is  a basic  service  of the                 
  community.    A  small  roadhouse,  restaurant, and  lodging                 
  facility pay a  sales tax.   Airlines derive a benefit  from                 
  revenues.  Just as  ground taxi service is a  taxable entity                 
  in  St. Mary's, air taxi  operations and freight should also                 
  be taxed.  There is no distinction between that and wharfage                 
  fees for use of the dock.                                                    
  Ms. Williams observed that in  discussion with air carriers,                 
  the carriers are not able to adequately defend the fact that                 
  intrastate trade is  tax exempt.   City  attorneys have  not                 
  found referenced  cases particularly adequate in  defense of                 
  carrier contentions.  Bush communities  are asking that they                 
  be allowed to tax, at local  rates, sales of services out of                 
  their communities.   The tax  at St. Mary's  is intended  to                 
  recoup lost raw  fish tax revenues  and cover the impact  on                 
  airports and community services.                                             
  TIM  TROLL, City  Administrator/City  Attorney, Sand  Point,                 
  Alaska, next  testified via  teleconference from  Anchorage.                 
  He  voiced support for the position  of the Alaska Municipal                 
  League.   He reference a recent Anchorage Daily News article                 
  which indicates need  for the proposed legislation  to avoid                 
  potential  litigation   brought  by   the  fact   that  city                 
  administrators  "are  always  looking  at  this  area  as  a                 
  possible source  of new revenue."  Mr.  Troll suggested that                 
  the legislation  would lead  to more  litigation because  it                 
  will create a "whole  new area of state jurisprudence  as to                 
  exactly what  was meant  and how  extensive this  particular                 
  provision would go."  Will it prohibit Bethel from levying a                 
  use tax on alcohol imported into the community?                              
  Mr. Troll suggested that if the  position of air carriers is                 
  that  the proposed bill  merely makes clear  what is already                 
  clear in federal law that freight service is exempt, perhaps                 
  the bill should simply state:                                                
       Notwithstanding other provisions of law, a municipality                 
       may  not  levy  or   collect  a  tax  or  fee   on  the                 
       transportation of  individuals or goods by  a federally                 
       certificated air  carrier, except to the extent allowed                 
       by 49 U.S.C., Sec. 1513 (b).                                            
  Subsection (b) is the language communities claim  authorizes                 
  state and  political subdivisions to  "at least look  at the                 
  area of freight as a possible source of taxation."                           
  Mr.  Troll suggested  that  action on  CSSB 261  (Fin) would                 
  result  in  passage   of  bad   law  and  special   interest                 
  legislation.  It would  further restrict municipalities that                 
  are receiving less from the state  and being told to be more                 
  responsible   locally.     Mr.  Toll   suggested  that   the                 
  legislature review methods to even the tax load rather  than                 
  pass bad  legislation.   He noted  that most  states have  a                 
  state sales tax  which alleviates the problem  of intrastate                 
  taxes  among  communities.    A  level playing  field  might                 
  include a state tax that is shared back with municipalities.                 
  That would be precluded if the proposed bill is passed.                      
  End:      SFC-94, #30, Side 1                                                
  Begin:    SFC-94, #30, Side 2                                                
  REED STOOPS  next came  before committee  on  behalf of  the                 
  Alaska Air Carriers Association.   He voiced support for the                 
  legislation.  He explained  that while federal law  is clear                 
  as to what is and is not taxable in commercial aviation, the                 
  benefit  of  the  proposed  bill   is  to  avoid  additional                 
  Mr. Stoops directed attention to  correspondence to and from                 
  the U.S. Department of Transportation.  He noted language in                 
  October  2,   1986,  correspondence   from  the   department                 
  indicating that  taxes on passengers and  interstate freight                 
  are  not  permissible.     That  is  intended   to  prohibit                 
  regulation   of   interstate   commerce--a  normal   federal                 
  preemption.  Further, federal taxes on those services accrue                 
  to  the  federal airport  trust  fund, and  trust  funds are                 
  returned to  states for airport  improvements.  Alaska  is a                 
  beneficiary of the system.  The state actually collects more                 
  in trust funds than it pays in taxes.                                        
  The  only  area  that  general  counsel indicated  might  be                 
  eligible for taxation is intrastate air freight.  Subsequent                 
  to the correspondence,  the circuit  court in Florida  ruled                 
  that intrastate air cargo is also exempt from taxation.                      
  Federal  law   is  clear.     Litigation   costs  for   both                 
  municipalities  and  air carriers  should  be avoided.   The                 
  proposed bill would be beneficial to that end.                               
  Speaking to  the situation  at Haines,  Mr. Stoops  observed                 
  that  the  fiscal  note  from  the Dept.  of  Community  and                 
  Regional Affairs indicates  nominal collection of tax.   The                 
  air cargo tax is  not being paid by one or  two of the three                 
  carriers into Haines.   By virtue  of the Florida  decision,                 
  the tax could easily be overturned.                                          
  Mr. Stoops voiced his understanding that the City of  Bethel                 
  seeks to levy  a tax on  alcohol coming into the  community.                 
  He noted that Anchorage sales taxes  would cover the sale at                 
  the point of origin, and air freight taxes are prohibited by                 
  law.   It would thus not be  appropriate for the air carrier                 
  to collect the proposed tax.                                                 
  Addressing comments by  the city  administer of Sand  Point,                 
  Mr. Stoops suggested that the bill is  written as suggested.                 
  It   specifically   references   municipal  taxation   under                 
  "113(b)."    That  was  at  the  suggestion  of  the  Alaska                 
  Municipal League.   Federal Code section "113(b)"  speaks to                 
  areas in which  municipal or state  taxes can be  collected.                 
  It is not the  intent to deny municipal collection  of legal                 
  taxes such  as  landing fees,  fuel  flowage fees,  fees  on                 
  airline meals,  or fees  on indirect  services.  Mr.  Stoops                 
  reiterated   that   it  is   not   the  intent   to  deprive                 
  municipalities of collection  of legal  taxes under  federal                 
  Mr. Stoops advised that federal  certificates referred to in                 
  the  legislation   encompass  Part   101  certificates   for                 
  scheduled air  carriers and  Part 135  certificates for  air                 
  charter operations.                                                          
  Crystal Smith again  came before committee on  behalf of the                 
  Alaska Municipal League.   She referenced February  5, 1993,                 
  correspondence from  general counsel at the  U.S. Department                 
  of Transportation and noted that it was issued subsequent to                 
  the Florida  decision.   It reiterates  the position  that a                 
  state tax and, by  extension, a municipal tax may  be levied                 
  on intrastate transportation of air property.  The  issue is                 
  not as clear  cut as  air carriers would  have one  believe.                 
  Senators Rieger and  Kerttula requested  copies of the  1993                 
  Co-chair  Pearce called  for  additional  discussion of  the                 
  bill.   None  was  forthcoming.   She  then queried  members                 
  regarding disposition.  Senator Sharp  MOVED for adoption of                 
  the proposed letter  of intent,  advising that it  clarifies                 
  that the intent of the bill is to "make state law exemptions                 
  for what the federal law states."   No objection having been                 
  raised, the letter of intent was ADOPTED. Senator Sharp then                 
  MOVED  that  CSSB   261  (Fin)  pass  from   committee  with                 
  individual  recommendations, accompanied  by  the letter  of                 
  intent and three fiscal notes.  Co-chair Pearce called for a                 
  show of hands.   The motion carried with only  Senator Jacko                 
  objecting.   CSSB 261  (Fin) was  REPORTED OUT  of committee                 
  with the Senate Finance letter of  intent, zero fiscal notes                 
  from the Dept.  of Transportation and Public  Facilities and                 
  Dept. of  Community and  Regional Affairs,  and a  municipal                 
  fiscal note from the Dept. of Community and Regional Affairs                 
  indicating minimal loss.  Senator Sharp signed the committee                 
  report with a  "do pass"  recommendation.  Co-chairs  Pearce                 
  and Frank and  Senators Kelly,  Kerttula, and Rieger  signed                 
  "no rec."  Senator Jacko signed "Do not pass."                               
  SENATE BILL NO. 251                                                          
       An  Act relating  to  the commercial  fishing revolving                 
       loan fund and the  fisheries enhancement revolving loan                 
  Senator Kelly explained that the subcommittee considering SB
  251 met and wishes to propose  an amendment that would place                 
  a three-year sunset on ability to borrow money  for payments                 
  of taxes.   Co-chair Pearce voiced OBJECTION  for discussion                 
  purposes and advised  of her understanding the  Senate Labor                 
  and Commerce version  to which the amendment  would apply no                 
  longer  contains  provisions   relating  to  child  support.                 
  Members concurred.   Senator Jacko  explained that the  bill                 
  presently   provides    for   loans   for    IRS   payments,                 
  refrigeration,  and  refinancing   of  existing  loans  from                 
  conventional institutions to provide longer-term state loans                 
  with lower interest rates.  He further advised that CSSB 251                 
  (L&C)  capped loans  for tax  purposes  at $30.0.   Co-chair                 
  Pearce REMOVED her OBJECTION  to Amendment No. 1.   She then                 
  called for objections to adoption.  No objection having been                 
  raised,  Amendment No. 1  was ADOPTED.   Senator Kelly MOVED                 
  for   passage   of   CSSB    251   (Fin)   with   individual                 
  recommendations.  No objection having  been raised, CSSB 251                 
  (Fin) was REPORTED OUT of committee  with a zero fiscal note                 
  from   the  Dept.  of  Commerce  and  Economic  Development.                 
  Senators Jacko, Kelly, and Sharp signed the committee report                 
  with  a  "do  pass"  recommendation.   Co-chair  Pearce  and                 
  Senators  Kerttula  and Rieger  signed  "no recommendation."                 
  Co-chair Frank was absent from the meeting and did not sign.                 
  SENATE BILL NO. 276                                                          
       An  Act  relating  to  criminal  justice   information;                 
       providing procedural requirements for obtaining certain                 
       criminal  justice  information;  and  providing for  an                 
       effective date.                                                         
  Co-chair  Pearce  directed that  SB  276 be  brought  on for                 
  discussion.  Senator  Rieger explained  that the bill  deals                 
  with disclosure of criminal justice  information.  Section 1                 
  sets forth the following intent:                                             
       It is the intent of the legislature that the department                 
       administer the provisions  of this chapter in  a manner                 
       that  protects  victims  of  crime,  allows the  proper                 
       administration of justice, and avoids vigilantism.                      
  The   bill  seeks   to  allow   appropriate  disclosure   of                 
  information  for  proper   purposes  but  would   not  allow                 
  disclosure  to  those   who  merely  intend  to   engage  in                 
  Directing  attention  to  page 2,  line  17,  Senator Rieger                 
  attested to  a prior requirement  that the board  meet every                 
  six months,  plus  as often  as necessary.   Subsection  (c)                 
  provides shorter and cleaner language stating that the board                 
  shall  meet  at lease  once every  six  months.   An earlier                 
  requirement for an annual report  was removed from the bill.                 
  Senator  Rieger next referenced  page 8, line  15, and noted                 
  addition of the word "specifically"  to language relating to                 
  provision of information for enforcement of or for a purpose                 
  "specifically authorized by state or  federal law."  Earlier                 
  language referred  to local,  state,  or federal  law.   New                 
  language deletes the local reference.                                        
  Provisions  dealing  with  release  of  information  to  the                 
  governor or to  legislators have been removed.   Information                 
  would no longer be provided to legislators simply because of                 
  their legislative  status.   Senator Kerttula  asked if  the                 
  judiciary committee would be able to obtain the information.                 
  Senator  Rieger  noted  ability  to  access information  for                 
  public purposes per subsections (6) and (7) at page 8.                       
  New  language  at page  8,  lines  24 and  25,  parallels an                 
  earlier floor amendment on HB 69.  It provides that:                         
       (8)   current offender information may be provided to a                 
       person for any purpose, except that information may not                 
       be released  if the  release of  the information  would                 
       unreasonably  compromise  the  privacy  of  a  minor or                 
       vulnerable adult.                                                       
  The intent is to protect both minors and adult victims.                      
  Senator  Rieger  next directed  attention  to addition  of a                 
  definition for "complete" as set forth  on page 12, lines 18                 
  through 20.  "And entered within 90 days" was  added to make                 
  the intent of the definition clear.                                          
  At  page  15, line  6,  the words  "employed,  appointed, or                 
  permitted person" were  added to make a  distinction between                 
  the person requesting the information and the person seeking                 
  Senator Rieger then MOVED for adoption of the work draft (8-                 
  GS2005\K, Luckhaupt,  3/11/94) committee  substitute for  SB
  276. Senate  Kerttula stressed  that both  House and  Senate                 
  Judiciary Committees should have  access to criminal justice                 
  information.    No objection  having  been raised,  CSSB 276                 
  (Fin), "K" version, was ADOPTED.                                             
  Senator Rieger next  directed attention  to Amendment No.  1                 
  and Amendment No.  2, both  of which were  requested by  the                 
  Dept. of  Law.   DEAN GUANELI,  Assistant Attorney  General,                 
  Dept.  of Law,  came before  committee.   He  explained that                 
  Amendment No. 1 constitute a  transitional section needed to                 
  repeal  a number of  existing statutes  (all or  portions of                 
  which are incorporated in new statutes) but maintain current                 
  regulations and fee  schedules until new regulations  can be                 
  adopted for the statutory updates.  Senator Rieger MOVED for                 
  adoption  of  Amendment No.  1.   No  objection  having been                 
  raised, Amendment No. 1 was ADOPTED.                                         
  Mr.  Guaneli next  spoke to need  for Amendment  No. 2.   He                 
  explained  that  under  the original  version  of  the bill,                 
  mandatory fingerprinting requirements were intended to apply                 
  to adults or juveniles charged as  adults.  They were not to                 
  apply  to   juvenile   delinquents.      Language   limiting                 
  application was dropped  out of the  bill.  Amendment No.  2                 
  should be incorporated within CSSB 276 (Fin) "K" at page 12,                 
  line 9.  Senator Rieger MOVED  for adoption of Amendment No.                 
  2.  No  objection having  been raised, Amendment  No. 2  was                 
  Senator  Sharp directed attention  to page  8, line  20, and                 
  voiced  need  to  provide  legislative judiciary  committees                 
  access to criminal justice information.  He then proposed to                 
  add "including legislative judiciary committees" between the                 
  words  "research" and "subject."  Co-chair Pearce questioned                 
  whether access should be limited to judiciary committees and                 
  suggested that language should perhaps  refer to standing or                 
  special committees of the legislature.   Discussion followed                 
  among  members  concerning  the scope  of  access  and which                 
  subsection  legislative access  would properly  fall within.                 
  Senator Sharp voiced need  to incorporate legislative access                 
  within generic research provisions.  Co-chair Pearce queried                 
  members regarding support  for legislative access.   Senator                 
  Kerttula cautioned against restricting  the legislature from                 
  "being a full and equal branch of government."  He suggested                 
  that  legislative access  be restricted  but not  precluded.                 
  Co-chair Pearce remarked that if access is too restricted, a                 
  single chairman might  be able  to "thwart the  will of  the                 
  body in getting to information."  Mr. Guaneli suggested that                 
  access be structured similar to  legislative subpoena power.                 
  He  advised he  would undertake  development  of appropriate                 
  language, if the  committee wished  him to do  so.   Senator                 
  Kelly  concurred   in  need   for  a   deliberative  process                 
  associated  with  access.    Co-chair  Pearce  directed that                 
  Senators  Kelly  and   Sharp  work   with  Mr.  Guaneli   on                 
  development of  language for  committee review  at the  next                 
  SB 360 - COMMITTEE LEGISLATION FOR INTRODUCTION                              
  Co-chair Pearce  directed  attention  to  draft  legislation                 
  proposed for introduction in the Senate.  She explained that                 
  similar  legislation  was  introduced in  the  House.   That                 
  legislation has  time constraints, hence  need to  introduce                 
  like legislation in  the Senate for more  expedient passage.                 
  In  the  FY  94  budget,  the  governor  requested,  and the                 
  legislature authorized, transfer  of $1.6  million from  the                 
  community  developmental  disabilities   grant  to   medical                 
  assistance.  Project Choice is a waiver program developed to                 
  finance  care  for  individuals whose  care  was  previously                 
  provided  through   DD  grants.     The  transfer   included                 
  authority,   responsibility,   and   funding.       However,                 
  implementation of Project Choice was substantially  delayed.                 
  Only  $400.0 of  the $1.6  million has  been used in  FY 94.                 
  Representatives  of the  Key Campaign  indicate  that people                 
  have thus been caught without funding.   The Dept. of Health                 
  and  Social  Services has  only  processed six  waivers, and                 
  there is  a waiting  list of over  500.   The proposed  bill                 
  would move remaining moneys from  medical assistance back to                 
  the  DD  grants   to  allow  grantees  to  complete   FY  94                 
  operations. The legislation must be passed and signed by the                 
  governor before  April 1 for  grant funding to  be available                 
  for the  remainder  of the  fiscal  year.   Co-chair  Pearce                 
  called for opposition.   None was  raised, and the bill  was                 
  approved for introduction.  It  was subsequently numbered SB
  The meeting was adjourned at approximately 12:20 p.m.                        

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