Legislature(1995 - 1996)
04/02/1996 09:15 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
MINUTES SENATE FINANCE COMMITTEE April 2, 1996 9:15 a.m. TAPES SFC-96, #63, Sides 1 and 2 SFC-96, #64, Side 1 (000-046) CALL TO ORDER Senator Steve Frank, Co-chairman, convened the meeting at approximately 9:15 a.m. PRESENT In addition to Co-chairman Frank, Senators Donley, Phillips, Rieger, Sharp, and Zharoff were present. Co-chairman Halford arrived soon after the meeting began. ALSO ATTENDING: Senator Duncan; Beth Kerttula, Assistant Attorney General, Natural Resource Section, Dept. of Law; Annie Carpeneti, Assistant Attorney General, Criminal Division, Dept. of Law; Jeff Bush, Deputy Commissioner, Dept. of Commerce and Economic Development; Jane Angvik, Director, Division of Land, Dept. of Natural Resources; Eddy Jeans, Project Assistant, School Foundation, School Finance, Dept. of Education; Gene Dau, American Association of Retired Persons and the Veterans of Foreign Wars; Kathy Tibbles, Division of Family and Youth Services, Dept. of Health and Social Services; Carl Rose, Executive Director, Alaska Association of School Boards; Chris Christensen, Staff Counsel, Alaska Court System; Kelly Huber, aide to Senator Halford; and aides to committee members and other members of the legislature. ALSO PARTICIPATING VIA TELECONFERENCE: Mary Hughes, Municipal Attorney, Municipality of Anchorage; Wayne Woods, Dan Montgomery, and Loren Karro, MatSu. SUMMARY INFORMATION SB 244 - CALCULATION OF STATE AID TO EDUCATION Discussion was had with Eddy Jeans of the Dept. of Education and Carl Rose of the Alaska Association of School Boards. Senator Frank listed areas of consensus to be incorporated within a draft Finance Committee Substitute. The bill was then held in committee pending preparation of the draft. SB 253 - INSURANCE FOR PROSTATE CANCER TESTING Amendment No. 2, incorporating coverage of cervical cancer screening within the bill, was adopted. CSSB 253 (Fin) was then REPORTED OUT of committee with a zero fiscal note from the Dept. of Commerce and Economic Development and a zero note from the Dept. of Administration (for all agencies), containing updated analysis language. SB 270 - JUVENILE OFFENDER PROCEEDINGS & RECORDS Discussion was had with Kathy Tibbles of the Dept. of Health & Social Services, Kelly Huber of Senator Halford's staff, and via teleconference with Mary Hughes of the Municipality of Anchorage. The bill was held in committee pending preparation of fiscal notes evidencing department restructuring. HB 335 - BIG GAME COMMERCIAL SERVICES BOARD Draft SCS CSHB 3355 (Fin) dated 3/37/96 was distributed. Wayne Woods advised of proposed changes via teleconference from MatSu. Comments were also presented by Jeff Bush of the Dept. of Commerce and Economic Development, Jane Angvik of the Dept. of Natural Resources, and Assistant Attorney General, Beth Kerttula. The bill was subsequently held in committee for additional review. SENATE BILL NO. 253 An Act relating to insurance coverage for costs of prostate cancer detection. Co-chairman Frank directed that SB 253 be brought on for discussion, noted adoption of Amendment No. 1 when the bill was previously before committee, and referenced Amendment No. 2. Senator Rieger MOVED for adoption of Amendment No. 2 and requested unanimous consent. Co-chairman Frank objected for the purpose of an explanation. Senator Rieger attested to committee consensus to investigate and add coverage for annual pap smear cancer screening to provide symmetry to legislation covering prostate cancer detection. Information obtained from the American Cancer Society provided the recommended age bracket included in the amendment. The prime sponsor is supportive. Senator Sharp inquired concerning the fiscal impact of the addition. Senator Rieger said he suspected the approach to the addition would be similar to that for the original bill. The up-front cost of testing is well known, but the benefits of prevention are difficult to quantify. The theory is that, overall, there is a cost savings. Senator Sharp attested to need for glaucoma testing as well and suggested that it would result in a better return on funding. Co-chairman Frank called for objections to adoption of Amendment No. 2. No objection having been raised, Amendment No. 2 was ADOPTED. Senator Zharoff MOVED for passage of CSSB 253 (Finance) with individual recommendations. No objection having been raised, CSSB 253 (Finance) was REPORTED OUT of committee with a unanimous "do pass" recommendation and zero fiscal notes from the Dept. of Commerce and Economic Development and the Dept. of Administration. SENATE BILL NO. 244 An Act relating to state foundation aid and supplementary state aid for education; and providing for an effective date. Co-chairman Frank directed that SB 244 be brought on for discussion, advised that it was previously heard, and explained that he had been working on a committee substitute which would include: 1. An attempt to make the bill revenue neutral by increasing the deduct from 95 to 96 percent. 2. Making the bill effective during 1996 to offset supplemental funding. 3. An FY 96 hold harmless for districts that would lose more than they gain in this fiscal year. 4. Removal of the single site addition with the recognition that it would be dealt with in any future foundation formula change. The Co-chairman voiced his hope that members would find the foregoing acceptable as a compromise. He remarked that a draft furnished to him prior to the meeting was incorrect and returned for revisions. Co-chairman Frank suggested that general discussion and feedback from the department and committee members proceed. [Co-chairman Halford arrived at the meeting at this time.] EDDY JEANS, Project Assistant, School Foundation, School Finance, Dept. of Education, came before committee and advised that the foregoing proposal would be acceptable to the department. Senator Rieger voiced his understanding that the idea behind not "going to a 100 percent deduct was that there had to be some small residual in order to induce a school district to apply for PL 874 moneys." If the formula results in an entitlement, PL 874 moneys are deducted from the entitlement. He then questioned whether the residual inducement was necessary. With a 100 percent deduct, a compelling inducement to apply for PL 874 moneys remains because those funds are needed to bring districts to full entitlement. Mr. Jeans explained that the state cannot require school districts to apply for impact-aid funds. The foundation program utilizes impact-aid moneys to determine the state allocation. If school districts do not apply and receive these funds, there is nothing to deduct to "adjust state aid by." Senator Rieger voiced his understanding of the foregoing to mean that the formula does not deduct the entitlement but actual receipt of the funds. Mr. Jeans concurred. In response to a further question from Senator Rieger, Mr. Jeans explained that school districts that apply for impact- aid funds are entitled to a greater amount than they currently receive. Funding is based on an annual appropriation from Congress. That appropriation has been less than entitlement. The foundation statute also clearly states that it is based on funds received in response to the application rather than the entitlement. Senator Zharoff raised a question regarding removal of single site schools. He attested to support for the original legislation on behalf of the state board of education, school board administrators, and NEA and suggested that removal of single site provisions represents a "step backwards." He expressed disappointment with the proposed compromise. Co-chairman Frank acknowledged the concern, but voiced his expectation that single site language would be included in the budget. Senator Zharoff next distributed an amendment (copy on file in the original Senate Finance Committee file for SB 244) and explained that he had been asked to provide it for consideration on behalf of another member of the Senate. The amendment relates to funds identified for preschool children. Speaking to the amendment, Mr. Jeans explained that impact-aid law was amended in 1994 to allow school districts to claim preschool children for impact-aid funds. The proposed amendment would have the state "back those funds out before it considers the impact aid." The arrangement would be similar to the special education add-on and the Indian lands' add-on. The impact-aid program does not currently address preschool funds as incremental funds the state cannot consider. The foundation program does not provide funds for preschool children. That is the reason for the amendment. Co-chairman Frank voiced his understanding that amendment provisions would reduce the state deduct in districts with preschool programs that qualify for federal funds. Mr. Jeans concurred. He added that impact-aid funds are currently paid at a hold harmless level--a percentage of the '94 year. Even though districts could claim these students, they are not receiving funding for them at this time. The department is aware of the issue and will be working with the U.S. Department of Education on how to properly address it. Discussion of proper terminology for former PL 874 moneys followed. Mr. Jeans advised that it is now referred to as "Title 8" moneys. CARL ROSE, Executive Director, Association of Alaska School Boards, came before committee. He noted that he was on record in support of SB 244 but expressed concern regarding the proposed compromise and removal of single site provisions. Many small districts depend on single site funds for 10 to 15 percent of their overall budgets. If this funding remains outside the foundation, "Any kind of a decrease could affect them twice": once through the foundation and a second time due to the possibility of not receiving additional supplemental funding. Mr. Rose voiced need for clarification of the impact from increase of the deduct from 95 to 96 percent. Co-chairman Frank reiterated that it attempts to render the legislation revenue neutral. Co-chairman Halford directed that SB 244 be held in committee pending receipt of the compromise committee substitute. SENATE BILL NO. 270 An Act relating to juveniles; relating to the jurisdiction of juvenile courts; relating to the release of juveniles; and relating to records concerning juveniles. Co-chairman Halford directed that SB 270 be brought on for discussion. He then explained that the original bill contains changes in procedures dealing with minors and changes in confidentiality of minors' records. CSSB 270 (Judiciary) removes confidentiality provisions which were the subject of much debate and discussion regarding impact of the change and possible loss of federal funding. Senator Randy Phillips questioned whether changes in state law should be either driven or precluded by receipt or loss of federal moneys. Co-chairman Frank concurred. He acknowledged need to better understand the federal situation. He said he asked the department to determine whether it is possible to meet state objectives and retain federal funds. Co-chairman Halford voiced his hope that changes at the Congressional level would ease the situation. Senator Sharp attested to constituent concern regarding confidentiality. Residents want to know if criminals are living in their neighborhoods. Senator Randy Phillips voiced lack of support for Senate Judiciary removal of the confidentiality change. KELLY HUBER, aide to Co-chairman Halford, came before committee to speak to accompanying fiscal notes. She explained that the cost shown on the Dept. of Health and Social Services note for the original bill totals $7,625.9. Senate Judiciary Committee did not wish to become involved in potential loss of federal funds and deleted all language relating to juvenile records in its version. To a comment by Senator Phillips that the Judiciary substitute essentially "guts the bill," Co-chairman Halford noted that the new version contains provisions that help, in terms of what courts may consider, and allows application of municipal offenses. Removal of confidentiality from juvenile records would have the most immediate impact and the least cost if federal funds were not involved. KATHY TIBBLES, Division of Family and Youth Services, Dept. of Health and Social Services, came before committee. Speaking to federal funding, she said the department has repeatedly been told that if information relating to juveniles is made public "on a blanket basis--full disclosure," Alaska will be ineligible to apply for federal funds through Titles 4(b) and (e). That amounts to "roughly $7.6 million." Most states publish juvenile records. That publication is allowed because juvenile delinquents are not in the same agency as children in need of aid--for which the foregoing federal titles were established. While the division was originally told it would suffer financial penalties if it disclosed information, it has since been indicated that it would be possible for the division to restructure organizationally. While that would incur some cost, administratively, it would not "be the same kind of loss of $7.6 million." The division is examining a restructuring that would meet federal approval and allow disclosure of "some degree of information with regard to juvenile delinquents." The division recognizes concerns at both the community and legislative level. The Governor's conference on juvenile justice is discussing the issue this week. Ms. Tibbles asked that the division be given an opportunity to attempt to restructure and reach an agreement with the federal government that will not jeopardize funding. Co-chairman Halford asked if the structural break between delinquents and child-in-need-of-aid provisions is statutory or within the department. Ms. Tibbles responded, "It's within the department." In response to a question from Senator Rieger, Ms. Tibbles explained that waiver of a juvenile to adult court removes all constraints. The minor is treated as an adult. Senator Sharp asked that information from the federal government on potential loss of funds be provided to members. Ms. Tibbles agreed to do so. Co-chairman Halford asked if constraints are applied to release of juvenile delinquency records if they are not contained within child-in-need-of-aid provisions. Ms. Tibbles responded, "Mr. Chairman, I do not believe that there are." The concern is that a section of the state out- of-home-care population would not be eligible for reimbursement for foster or residential care expenditures from the federal government. That is one reason Alaska has continued to try to mesh the two, so that the state could maximize federal receipts in foster and residential care by including juvenile delinquents. That places the state in the position of not being able to release the records. Ms. Tibbles cited difficulties associated with sorting out funding within the single BRU. She added that a good share of the federal receipts not only apply to reimbursement for foster care costs but to administrative costs associated with serving minors (social workers and probation officers). It is difficult to determine how much would be lost. Co-chairman Halford asked if it would be possible to develop a fiscal note that reflects the cost of separation of child- in-need-of-aid activities as well as the incidental loss of federal funds resulting from removal of juvenile records. Ms. Tibbles said she would not guarantee it would be forthcoming before the end of the week. Co-chairman Halford suggested it would be worth waiting for the information and further suggested that the bill be held in committee pending receipt. MARY HUGHES, Municipal Attorney, Municipality of Anchorage, next spoke via teleconference from Anchorage. She expressed support for the original bill which she said incorporates some of the municipal partnership plan. Addressing discussion of potential loss of federal funding, Ms. Hughes said the municipality made inquiries at the federal level and was told that division reorganization would solve the problem. Laws dealing with delinquents have different rules and regulations than these involving children in need of aid. Ms. Hughes advised that the legislation also deals with jurisdictional questions and would provide municipal jurisdiction over "minor civil juvenile infractions." It also enumerates dispositional considerations that must be made by the court in terms of what is in the best interest of the child and what is in the best interest of the public. It mirrors conditions of bail in adult criminal provisions. Ms. Hughes concurred in Co-chairman Halford's decision to await receipt of fiscal note information regarding division restructuring. She voiced support for "some type of release of information." In response to a question from Senator Phillips, Ms. Hughes directed attention to page 4, line 1 through 18, of the original bill and explained that under current law, the juvenile's interests take priority over the interest of the public. Provisions enumerated at page 4 protect the public. Senator Randy Phillips asked if the department philosophically supports release of the names of juvenile offenders. Ms. Tibbles responded, "To some extent." She expressed concern about a piecemeal approach that would release the names of all young people alleged to have committed a delinquent act in the absence of ability to later clear the juvenile's name if he or she was subsequently acquitted. Ms. Tibbles further attested to levels of delinquent acts. She noted that a large number of young people, in the process of growing up, make stupid mistakes, learn from the mistake, and do not reoffend. The department is not convinced that release of those names would serve a valid interest for either the juvenile or the public. However, the department agrees that some information should be released for both a deterrent effect and protection of the public. Senator Rieger suggested that the value of deterrence rests in sanctions it might impose on those considering commission of a crime. He then expressed discomfort with the wording in subsection (5) on page 4 of the original bill. He questioned the wisdom of making an example of one person beyond the gravity of the crime, to have an effect on others. Discussion followed between Senator Zharoff and Co-chairman Halford regarding language within subsection (7) of the original bill and facilities for detention of minors. END: SFC-96, #63, Side 1 BEGIN: SFC-96, #63, Side 2 Further discussion followed between Senator Zharoff and Ms. Tibbles concerning where the line on disclosure of a juvenile crime should be drawn. Ms. Tibbles cited juvenile sex offenders as an example. CS FOR HOUSE BILL NO. 335(RES)(title am) An Act extending the termination date of the Big Game Commercial Services Board; eliminating the requirement for a commercial use permit and for payment of commercial use permit fees; amending the membership of the Big Game Commercial Services Board; relating to the qualifications for an assistant guide-outfitter license; eliminating the requirement for testing of assistant guide-outfitters; providing for additional licensing requirements for transporters; eliminating the requirement for prior approval to enter or remain on state and federal land; eliminating the requirement to register base camps; amending the definition of 'big game commercial services'; and providing for an effective date. Co-chairman Halford directed that CSHB 335 (Res)(title am) be brought on for discussion and distributed a work draft Senate Finance Committee Substitute (9-LS1156\N, Utermohle, 3/27/96) for review by members. He explained that the draft was reviewed by the sponsor, the Dept. of Public Safety, Dept. of Commerce and Economic Development, Dept. of Labor, and Dept. of Natural Resources. There is agreement on most of the provisions, but there are areas in which the constituency to be regulated is not happy. One group would like to have more regulation and more protection from competition. The other group seeks the opposite. Criminal provisions within the bill are "probably stronger than virtually any other profession" in the size of the fines and ability to consider some conduct a felony. Entry into the profession is primarily the same as under old guide laws. The profession is aligned with registered and master guides. A master guide is merely a senior registered guide. There are also assistant guides, class-A assistant guides, and transporters. The regulatory structure is similar to existing law. Provisions relating to powers and duties are transferred from the previous board to the department, with some exceptions. Penalties for violations can be as high as $30.0. That stems from existing law. Many objections have been raised by the profession over penalties that high. Questions also surround administrative sanctions and possible limiting of sanctions to those imposed by the courts. Co-chairman Halford acknowledged that the Dept. of Labor is not in favor of the 60-day exemption from wage and hour provisions for assistant guides in remote locations. This exemption is far less than existing exemptions set forth in law. Another provision for which there is department opposition but industry support relates to permission to use land. Under old law, permission must be obtained from federal, state, or private entities. The proposed bill continues to require that permission be obtained. However, since hunting areas are now simply registration areas through the Department of Public Safety, enforcement provisions must be carried out by the agency. JANE ANGVIK, Director, Division of Land, Dept. of Natural Resources, came before committee. She voiced concern over elimination of the requirement that guides furnish proof of prior authorization to use state lands. Based on past experience, if this requirement does not continue, commercial guides will most likely not seek state land use permits. While Title 38 provides the division with authority to require permits for all commercial uses, it does not provide an incentive for individuals to secure permits nor does it provide the division with enforcement capabilities. The only recourse against those who do not secure permits is through the civil courts. The division has no authority to issue citations resulting in financial penalties as does the Dept. of Fish and Game or the division of parks. The most significant management issue is need to identify those who leave garbage and solid waste on state lands. Ms. Angvik distributed photographs of debris left behind by camps. Ms. Angvik stressed need for proof of permission to use federal, state, or private lands (at the time of licensing) as an incentive to obtain permission. She asked that the bill be amended to require that proof. Since regulations became effective in 1993, there has been a 75 percent increase in those who came to the department to secure permission to use state lands. The division processes an average of 350 licenses at $350.00 each and has raised $132.0 through regulatory provisions. A decline is expected if provisions within the proposed bill remain as now drafted. Co-chairman Halford pointed to requirements that a guide notify the Dept. of Commerce and Economic Development of the guide unit within which he or she will be operating. The Dept. of Natural Resources can pursue guides who do not clean up camp areas. Proof of prior approval for use of a specific location proved to be a "bureaucratic nightmare" that applied only to guides. It was felt that application to this commercial entity alone was unfair since competitors such as fishing guides, ecotourism, etc. do not have to do the same. Co-chairman Halford stressed that the registration requirement in the proposed bill is an enforcement tool rather than an economic regulation tool. A guide must notify the department, 30 days in advance, of where the guide will be operating. That notification lasts through that particular year. This is a compromise between prior guide-use areas and the majority of the profession which would prefer not to have established areas. The Chairman stressed that the permit within the Dept. of Natural Resources, that applies to all commercial users of state land, is only being enforced against guides. Senator Phillips asked why it was not enforced against all users, and Ms. Angvik explained that the requirement was, in the past, directly connected to the guide license. The department does not have "that kind of a carrot" for other commercial users. Co-chairman Halford next noted teleconference participation in discussion of the bill. WAYNE WOODS, a guide from MatSu, next spoke via teleconference and presented the following list of recommended changes: Page 4, line 10: Delete current language in (a) and replace with: A major violation of a state hunting, guiding, or transportation services statute or regulation within the last five years. Page 6, line 16: Delete "18" and insert "21" Page 6, lines 22 and 23: Delete: In the management unit for which the license is sought. Page 6, line 27: Delete all of section (B) Page 10, line 11: After "$100,000," insert: In the case of registered guides, proof of financial responsibility shall only be required when applying for a guide- use area. Page 10, lines 23, 24, and 25: Delete Secs. (2) and (3) Page 11, line 31: Add a new section to read: (1) the department shall act on disciplinary matters in a timely manner, and the department may only impose disciplinary actions that are no greater than those imposed by a court of competent jurisdiction, nor may the department impose any disciplinary action that extends beyond the limits of a judgment of conviction imposed by a court of competent jurisdiction. Page 12, line 2: Delete "20" and insert "30" Page 15, line 2: Replace "is" with "may be held" Page 15, line 4: After "guide" insert: if there is a demonstrable complicity shown Page 15, line 8 After "transporter" insert: if there is demonstrable complicity shown Page 16, add to definition section: 'guide-use area' means a game management unit or sub-unit as defined by the board of game 'major violation' means: (1) hunting the same day as airborne (2) wanton waste (3) hunting in a closed area (4) taking game during a closed season Mr. Woods advised that with incorporation of the foregoing changes, he felt he could work well "within this set of regulations." Senator Zharoff raised a question regarding the meaning of "demonstrable complicity." Co-chairman Halford explained that it relates to guide responsibility for the actions of his or her employees. Current law imposes a high standard. The proposed language requires that complicity be shown. JEFF BUSH, Deputy Commissioner, Dept. of Commerce and Economic Development, came before committee in response to the question. He said he did not know if there is a legal standard known as "demonstrable complicity." All criminal provisions within the bill require knowledge. He then voiced his assumption that "knowledge" would constitute "demonstrable complicity." He suggested the following as alternative language: Page 15, lines 4 and 8: If the registered guide knew or should have known of the violation. In response to a question from Co-chairman Halford, Mr. Bush noted that the department is on record in support of the bill. He concurred in concerns raised by other departments but said he felt comfortable with the legislation. Senator Phillips advised of the following notes on behalf of Senator Rieger who had previously left the meeting: Page 4, lines 9 through 15: Concern that language represents an all-or-nothing proposition. Page 15, line 8 Change "for" to "of" Page 16, between lines 30 and 31: Add a new sec. (e) containing double fees for non-residents. Co-chairman Halford said he had no objection to doubling fees. He then asked for the department's position. Mr. Bush referenced discussion of the issue with the Dept. of Law. The position from a policy perspective is one of support for the concept. The position from the Dept. of Law perspective is that it would probably be unconstitutional. Co-chairman Halford asked why the increased cost would not apply to guide licenses since it applies to fishing licenses. Mr. Bush noted that the courts have allowed an agency to charge the "full cost of a licensed activity to a non-resident" and essentially subsidize residents. In this case the entire cost is paid by licensees. There is no state subsidy. Co-chairman Halford suggested that enforcement and DNR management of lands are part of the costs associated with the common property resource. The license fee covers only the direct cost of the license. Mr. Bush advised that he was not an expert and deferred further comment to staff from the Dept. of Law. The Co-chairman noted that out-of-state hunters pay more for licenses. Senator Zharoff noted that Legislative Research conducted a brief survey of ten western states and determined that six states, including Alaska, charge the same licenses fee for both resident and non-resident guides. Utah and Washington do not license big game guides. Arizona charges $100.00 for a resident and $500.00 for a non-resident. Oregon requires registration rather than a license for outfitters and guides. Residents pay $50.00, and non-residents pay according to similar fees in their own states. Co-chairman Halford expressed concurrence in the higher fee, saying he would insert "whatever the Dept. of Law will tell us works." Mr. Bush said the department would have no problem adjusting its fees for non-residents and residents. He cautioned, however, that since fees pay for administration of the license program, the department would need supplemental funding should the issue be litigated and refunds to non- residents be ordered by the courts. BETH KERTTULA, Assistant Attorney General, Natural Resource Section, Dept. of Law, next came before committee. She referenced ongoing litigation over the three-to-one fee differential in the limited entry commercial fishery. The question is whether the state incurs costs for non-residents that it does not incur for residents. Ms. Kerttula urged that those costs be quantified. END: SFC-96, #63, Side 2 BEGIN: SFC-96, #64, Side 1 Mr. Bush cautioned that there is both a legal risk, in terms of justification, and a financial risk--the higher the differential, the more potential money is at stake in a lawsuit. Co-chairman Halford queried members concerning the ratio to incorporate within the proposed bill. Senator Sharp suggested 2 to 1. Senator Zharoff expressed a preference for 3 to 1 but concurred in the suggestion by Senator Sharp. ADJOURNMENT Due to need to attend the Senate Floor Session, the meeting was adjourned at approximately 10:50 a.m.