Legislature(1995 - 1996)

04/09/1996 01:50 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                             MINUTES                                           
                    SENATE FINANCE COMMITTEE                                   
                          April 9, 1996                                        
                            1:50 p.m.                                          
                                                                               
  TAPES                                                                        
                                                                               
  SFC-96, #70, Side 1 and 2                                                    
  SFC-96, #71, Side 1 (000-154)                                                
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Senator Rick Halford,  Co-chairman, convened the  meeting at                 
  approximately 1:50 p.m.                                                      
                                                                               
  PRESENT                                                                      
                                                                               
  In  addition  to  Co-chairmen  Halford  and  Frank, Senators                 
  Phillips and Rieger  were present.  Senators  Donley, Sharp,                 
  and Zharoff did not attend.                                                  
                                                                               
  ALSO  ATTENDING:   Senate  President  Drue  Pearce;  Senator                 
  Torgerson; Chris  Christensen, Staff  Counsel, Alaska  Court                 
  System; Jeff  Bush, Deputy  Commissioner, Dept.  of Commerce                 
  and  Economic  Development; Juanita  Hensley,  Chief, Driver                 
  Services, Dept.  of Public Safety; Kevin  Ritchie, Executive                 
  Director, Alaska Municipal League; Mark Hickey, representing                 
  the Alaska Railroad; Ted Popely,  Senate Majority Staff; Kip                 
  Knudson, aide to Representative Hanley; Daniella Loper, aide                 
  to Representative Porter; and aides to committee members and                 
  other members of the legislature.                                            
                                                                               
  SUMMARY INFORMATION                                                          
                                                                               
  SB  64 -  CONVERT ALASKA RAILROAD TO PRIVATE CORPORATION                     
                                                                               
            Discussion was  had with  Senate President  Pearce                 
            and Mark  Hickey.  A  draft CSSB 64  ("R" version,                 
            4/8/96) and two amendments were  adopted.  CSSB 64                 
            (Fin) was  REPORTED OUT  of committee  with a  SFC                 
            fiscal note for the Dept. of Commerce and Economic                 
            Development  showing  $900.0  in  Alaska  Railroad                 
            receipts.                                                          
                                                                               
  HB 158 -  CIVIL LIABILITY                                                    
                                                                               
            Review of amendments 7 through  16.  Amendments 8,                 
            9, 10, 11,  12, 13, 14,  15, and 16 were  adopted.                 
            Discussion of the Court System fiscal note was had                 
            with Chris Christensen.   SCS  CSHB 158 (Fin)  was                 
            REPORTED OUT  of committee with  accompanying zero                 
            notes   from   the   Dept.  of   Law,   Dept.   of                 
            Administration, and  Alaska Court System,  as well                 
            as  a $0.8  note from  the  Dept. of  Commerce and                 
                                                                               
                                                                               
            Economic Development.                                              
                                                                               
  HB 272 -  MUNICIPAL MOTOR VEHICLE TAX                                        
                                                                               
            Discussion  was had  with  Juanita Hensley,  Kevin                 
            Ritchie,  and Kip Knudson.  A conceptual amendment                 
            offered by Senator  Rieger was adopted.   SCS CSHB                 
            272 (Fin)  was REPORTED  OUT of  committee with  a                 
            zero fiscal note  from the Dept. of  Community and                 
            Regional Affairs and  a $44.5 note from  the Dept.                 
            of Public Safety.                                                  
                                                                               
  HB 335 -  BIG GAME COMMERCIAL SERVICES BOARD                                 
                                                                               
            Amendment  No.  1 was  adopted  into SCS  CSHB 335                 
            (Fin) ("N" version, 3/27/96).   SCS CSHB 335 (Fin)                 
            was then REPORTED OUT of  committee with a ($49.6)                 
            fiscal  note  from  the Dept.  of  Fish  and Game,                 
            ($1.8)  note  from  the   Dept.  of  Commerce  and                 
            Economic Development, and zero note from the Dept.                 
            of Public Safety.                                                  
                                                                               
  SCR 29 -  DISAPPROVE SETTLEMENT W/FERRY EMPLOYEES                            
                                                                               
            Testimony was presented  by Ted  Popely.  A  draft                 
            CSSCR 29  (Fin) (version "G," 4/9/96)  was adopted                 
            and  REPORTED  OUT of  committee  with a  zero SFC                 
            fiscal note for the Dept. of Law.                                  
                                                                               
                                                                               
  SENATE BILL NO. 64                                                           
                                                                               
       An  Act  relating  to  the  dissolution of  the  Alaska                 
       Railroad Corporation  and  providing  for  a  successor                 
       corporation; and providing for an effective date.                       
                                                                               
  Co-chairman Halford  directed that SB  64 be brought  on for                 
  discussion.   Senator  Rieger noted  that a  hearing on  the                 
  bill, last year, revealed that CSSB  64 (TRA) provided for a                 
  change of ownership of the Alaska Railroad in the form  of a                 
  stock corporation.  The theory behind  that was that if sale                 
  of the railroad could not be achieved as a complete one-time                 
  sale of all  assets, perhaps the  railroad could be sold  by                 
  selling shares  of stock,  over time,  without changing  the                 
  underlying corporate structure.  Since that time, at a joint                 
  Senate Finance and Senate Transportation meeting, an outside                 
  firm   made  a  presentation  indicating  it  was  genuinely                 
  interested in purchasing all of the assets.  That  increased                 
  the level of  confidence that  a complete sale  at one  time                 
  could  be  achieved.     The  draft  CSSB   64  (9-LS0579\R,                 
  Utermohle,  4/8/96)  reflects  a   modified  version  of  an                 
  amendment proposed in  Senate Transportation.  It  calls for                 
  sale of the railroad and prescribes time tables within which                 
                                                                               
                                                                               
  that is to occur.                                                            
                                                                               
  Senator  Rieger  referenced   scheduled  identification   of                 
  railroad assets (both  those needed for operation  and those                 
  which  are not).  Concern has been  raised that "some of the                 
  real estate which belongs to the railroad should not be part                 
  of the sale."  The first  phase of identification, scheduled                 
  for  August, focuses upon the real  estate and will identify                 
  what is necessary for operation and what is surplus.                         
                                                                               
  The  second  date, in  October,  is  the time  by  which the                 
  Governor will issue a request for proposals  for purchase of                 
  the railroad.                                                                
                                                                               
  The third deadline,  February 15, 1997, is  the deadline for                 
  reaching agreement  with the  maker of  the most  responsive                 
  offer to the RFP.                                                            
                                                                               
  Senator Rieger next pointed to Page 2, line 10, of the draft                 
  and  noted  the  requirement that  the  Governor  submit the                 
  agreement to the  Legislature to provide an  opportunity for                 
  Legislative disapproval.   It  is unclear  exactly when  the                 
  Governor is required to make the submission.  Senator Rieger                 
  suggested   that   the    following   additional    language                 
  (underlined) be added to line 10 so that the sentence reads:                 
                                                                               
       Upon entering into an agreement to sell the Alaska                      
       Railroad,  the  governor shall  immediately submit                      
       the agreement to the legislature for review during                      
       the regular session of the legislature.                                 
                                                                               
  A second concern relates  to preparation of a report  of the                 
  fair  market value  of the  railroad and  when the  document                 
  should  be  made public.    A  provision could  be  added to                 
  require  that  the report  remain  confidential  until after                 
  proposals  are received  or an  agreement  is reached.   The                 
  reason for the  fair market report is to evaluate proposals.                 
                                                                               
                                                                               
  The third issue is whether the legislative branch would want                 
  or  should have  input into  development of the  request for                 
  proposals.   Senator  Rieger subsequently  noted Legislative                 
  Budget   and   Audit   Committee  ability   to   review  the                 
  classification of  assets  necessary for  operation  of  the                 
  railroad.                                                                    
                                                                               
  Senator Rieger MOVED for adoption of the draft CSSB 64 dated                 
  4/8/96.   No objection  having been raised,  the "R" version                 
  was ADOPTED as CSSB 64 (Fin).                                                
                                                                               
  Senator Rieger voiced his belief that  only the first of the                 
  three issues  raised requires  a clarifying  amendment.   He                 
  then MOVED  for adoption of  the above-cited  language.   No                 
  objection having been raised, Amendment No. 1 was ADOPTED.                   
                                                                               
                                                                               
  Co-chairman  Halford  referenced  accompanying fiscal  notes                 
  indicating a cost of $800.0 to $1 million for preparation of                 
  the fair market analysis.   Senator Rieger acknowledged that                 
  earlier discussion indicated the cost could be as high as $2                 
  million.  He suggested it would be prudent for the committee                 
  to accept a fiscal note from  the department or railroad or,                 
  in  the  alternative,  write  a  committee note  to  provide                 
  funding for the effort.                                                      
                                                                               
  SENATE PRESIDENT DRUE  PEARCE noted that an  update provided                 
  last week indicated $2 million would be high.                                
                                                                               
  MARK HICKEY, representing the Alaska  Railroad, advised that                 
  the actual figure  for the 1983 valuation,  conducted by the                 
  United  States Railway Association  when the state purchased                 
  the railroad, was $863.0.  That represented a full valuation                 
  including an appraisal  of the  real property as  well as  a                 
  "going  concern"  assessment  with  a  ten-year  window  for                 
  operation.   That  is  where the  $22  million was  derived.                 
  While  some baseline data  may be  usable, the  valuation is                 
  twelve or thirteen  years old.  It is unknown  how much data                 
  would be useful to  the new valuation.  Co-chairman  Halford                 
  asked if  $900.0 in  corporate receipts  would be  adequate.                 
  Mr.  Hickey  responded that  it should  be adequate  for the                 
  appraisal.  He also noted  expenses associated with "running                 
  a process."   Senator  Rieger expressed  concurrence in  the                 
  $900.0, saying that  conferees could later amend  the number                 
  if  better information  is available.    Co-chairman Halford                 
  directed  that  a Senate  Finance  Committee fiscal  note be                 
  prepared  showing  $900.0  in   non-general-  fund  railroad                 
  receipts.                                                                    
                                                                               
  Senator Randy Phillips  raised a question regarding  how the                 
  transfer   would  affect   railroad   employees  and   their                 
  retirement and benefits.  Co-chairman Halford suggested that                 
  language  at  Page   1,  subsection  (2)  would   cover  the                 
  situation.   Senator Phillips  termed the  retirement system                 
  under federal jurisdiction "unique" and sought clarification                 
  of the status under the proposed sale.  Mr. Hickey explained                 
  that, in terms of  retirement, the railroad has two  classes                 
  of employees:                                                                
                                                                               
       1.   Those who have been with the railroad for a period                 
  of        time and fall under the federal program.                           
                                                                               
       2.   New employees  who joined  the railroad  following                 
  purchase       by the state.                                                 
                                                                               
  For those in  the federal  system, it seems  clear that  the                 
  definition  of what constitutes  a "state-owned railroad" is                 
  broad  enough  to  include a  private  entity  operating the                 
  railroad.  Those  employees will continue to  participate in                 
  the federal system as long as they remain with the railroad.                 
                                                                               
                                                                               
  They are covered by the previous transfer law.                               
                                                                               
  Newer  employees  are  in   a  different  retirement  system                 
  maintained by the  railroad.   Mr. Hickey said  he was  less                 
  comfortable  commenting  on  coverage,   without  additional                 
  information.  He  voiced his belief that  current bargaining                 
  agreements deal with  the retirement benefit as  a component                 
  of the agreement.                                                            
                                                                               
  Senator Phillips advised that he would feel more comfortable                 
  adding  language relating  to  retirement agreements.    Co-                 
  chairman Halford suggested that "and retirement obligations"                 
  be added to language at Page 1  so that the first portion of                 
  subsection (2) reads:                                                        
                                                                               
       (2)  accept assignment of all contracts, including                      
       collective  bargaining  agreements  and retirement                      
       obligations   and   agreements   with   connecting                      
       carriers, shippers . . . .                                              
                                                                               
  Senator Phillips formally MOVED for  adoption.  No objection                 
  having been raised, Amendment No. 2 was ADOPTED.                             
                                                                               
  Senator  Rieger then  MOVED  that CSSB  64  (Fin) pass  from                 
  committee  with  individual recommendations  and  the Senate                 
  Finance Committee  fiscal note.   No  objection having  been                 
  raised, CSSB 64 (Fin)  was REPORTED OUT of committee  with a                 
  Senate  Finance  Committee  fiscal  note showing  $900.0  in                 
  railroad  corporate receipts.    All  members  present  (Co-                 
  chairmen Halford and Frank and Senators Phillips and Rieger)                 
  signed the committee report with a "do pass" recommendation.                 
                                                                               
                                                                               
  CS FOR HOUSE BILL NO. 158(FIN) am(ct rls pfld)(efd fld)                      
                                                                               
       An Act relating to civil  actions; amending Alaska Rule                 
       of Civil Procedure 95.                                                  
                                                                               
  Co-chairman  Halford  directed that  SCS  CSHB 158  (Jud) be                 
  brought  back  before  committee  for  continued  review  of                 
  amendments.                                                                  
                                                                               
  Senator  Rieger  referenced  Amendment No.  7,  relating  to                 
  apportionment  of  fault,  and  reiterated  comments  at   a                 
  previous meeting which, he explained,  led him to decide not                 
  to offer the amendment.                                                      
                                                                               
  Senator Rieger  directed attention  to Amendment  No. 8  and                 
  explained that the issue of award  of attorney fees is often                 
  raised in  the offer of judgment process.   He noted that if                 
  the ultimate award is less than the offer of judgment, award                 
  of attorney fees  is against the plaintiff.  If the award is                 
                                                                               
                                                                               
  greater  than  the offer,  award  is against  the defendant.                 
  Complications occur surrounding application of interest when                 
  there is a substantial time span between the offer and final                 
  judgment.   Amendment No. 8 would require  comparison of the                 
  offer to the  judgment "at  a like time."   The court  would                 
  thus disregard  accrual of  prejudgment  interest after  the                 
  time the offer is  made.  Senator Rieger MOVED  for adoption                 
  of  the  amendment.    No   objection  having  been  raised,                 
  Amendment No. 8 was ADOPTED.                                                 
                                                                               
  Senator Rieger  explained that  Amendment No.  9 relates  to                 
  situations  in which there  are two or  more defendants, and                 
  one defendant offers  to settle but  the other or others  do                 
  not.    As  written,  the  bill  excludes  ability  for  one                 
  defendant to settle, even if his or her offer is reasonable.                 
  The amendment would delete that  provision.  DANIELLA LOPER,                 
  aide to Representative  Porter, came before committee.   She                 
  said the sponsor  did not concur in addition  of problematic                 
  language by Senate  Judiciary.  She concurred in removal per                 
  Amendment No. 9.   Senator  Rieger MOVED for  adoption.   No                 
  objection having been raised, Amendment No. 9 was ADOPTED.                   
                                                                               
  Senator Rieger explained that  language at Page 7, line  10,                 
  allows parties to  enter into a written  agreement to submit                 
  to arbitration.                                                              
  Present wording speaks to agreement "before the action."  He                 
  said he saw  no reason  why agreement could  not be  entered                 
  "after"  commencing the action.   Amendment No. 10 adds that                 
  option.   Senator Rieger MOVED  for adoption.   No objection                 
  having been raised, Amendment No. 10 was ADOPTED.                            
                                                                               
  Senator Rieger noted that  Amendment No. 11 also relates  to                 
  arbitration.   Under the proposed  bill a list  of attorneys                 
  with at least five years of  civil practice experience would                 
  be  eligible  to serve  as  arbitrators.   It  is  not clear                 
  whether  attorneys  with  that experience  might,  for other                 
  reasons,  not  be  qualified.    Language  in  the  proposed                 
  amendment  would   allow  the   court  to   flesh  out   the                 
  qualifications for those who agree  to serve as arbitrators.                 
  Co-chairman  Halford called  for objections.   No  objection                 
  having been raised, Amendment No. 11 was ADOPTED.                            
                                                                               
  Senator Rieger questioned  the sentence at  Page 8, line  7.                 
  It   refers  to  documents   that  would  be  "presumptively                 
  admissible."    Amendment  No. 12  says  that  the foregoing                 
  language may not be construed to require that the arbitrator                 
  use or rely  on documents when there is  reason to doubt the                 
  authenticity  or  accuracy of  the  documents.   Co-chairman                 
  Halford called  for objections.   No  objection having  been                 
  raised, Amendment No. 12 was ADOPTED.                                        
                                                                               
  Senator  Rieger  said that  while  Amendment No.  13 appears                 
   lengthy, it is not.  He directed attention to Page 18, lines                
  26  and  27, and  noted  language  specifying  that a  claim                 
                                                                               
                                                                               
  subject  to arbitration is not  subject to offer of judgment                 
  provisions.    He suggested  that  while  it should  not  be                 
  subject  to  the  portion  of  those  provisions  within  AS                 
  09.30.065(b), other portions of the provisions could  apply.                 
  Amendment No.  13 thus divides  09.30.065 into part  (a) and                 
  part (b).   Daniella  Loper directed  attention to  the last                 
  sentence  of  subsection  (b)  and suggested  that  language                 
  relating  to two  or  more defendants  be deleted.   Senator                 
  Rieger  concurred,  saying  the  language  was  incorporated                 
  within an  earlier adopted  amendment.   Co-chairman Halford                 
  advised  that  deletion  would  be  considered  a  technical                 
  amendment to Amendment No. 13  and would be adopted  without                 
  objection.  Senator  Rieger MOVED for adoption  of Amendment                 
  No.  13,  as  amended.   No  objection  having  been raised,                 
  Amendment No. 13 was ADOPTED as amended.                                     
                                                                               
  Senator Rieger next directed attention  to Amendment No. 14.                 
  He pointed to Page 9, line 22, as  well as several instances                 
  on Page 10 and noted reference to "non-employees."  Language                 
  within the bill  speaks to "staff"  and does not read  well.                 
  Amendment No. 14 deletes language that makes  a contractor a                 
  member of  the hospital  staff.   No  objection having  been                 
  raised, Amendment No. 14 was ADOPTED.                                        
                                                                               
  Senator Rieger directed attention  to Amendment No. 15.   He                 
  further referenced language at Page 12, lines 12 through 18,                 
  requiring  that rates decrease by 10 percent by December 31,                 
  1999.    The amendment  would  delete that  provision.   Co-                 
  chairman Halford called for  objections.  Co-chairman  Frank                 
  OBJECTED and  asked  if the  rationale was  a reluctance  to                 
  dictate pricing  in a piece of legislation.   Senator Rieger                 
  acknowledged that to be  the case, saying the provision  was                 
  contrary  to  free  market principles.    Co-chairman  Frank                 
  removed his objection.  In the absence of further objection,                 
  Amendment No. 15 was ADOPTED.                                                
                                                                               
  Senator Rieger  directed attention  to Page  7, line 8,  and                 
  referenced testimony from court system counsel that language                 
  relating to mandatory arbitration might eliminate ability to                 
  "go to small claims court."   The Senator suggested that the                 
  following  language be  added  at  Page  7,  line  8  (after                 
  $100,000 and before the semicolon):                                          
                                                                               
            or is eligible for small claims court                              
                                                                               
  CHRIS  CHRISTENSEN,  General Counsel,  Alaska  Court System,                 
  came before committee  voicing his belief that  the proposed                 
  language "would work."  As an alternative,  a new subsection                 
  (H) could be added at Page 7, line  19, to say:  "is a small                 
  claim  under  AS  22.15.040."    Senator  Rieger  MOVED  for                 
  adoption of the  language he  proposed, above, as  Amendment                 
  No. 16.  No  objection having been raised, Amendment  No. 16                 
  was ADOPTED.                                                                 
                                                                               
                                                                               
  Co-chairman Frank referenced a $867.0 fiscal note associated                 
  with arbitration  provisions within  the bill  and asked  if                 
  there would be an offsetting  reduction in litigation.   Mr.                 
  Christensen said  that the bulk of the  fiscal note reflects                 
  the cost of providing arbitration services for litigants who                 
  are legally indigent.   At the  present time, 95 percent  of                 
  all tort cases settle  without going to trial.   These cases                 
  are not costly to the system.                                                
                                                                               
  Mr.  Christensen  further  commented  on  effective  use  of                 
  arbitration in  contract and  family law  cases.   The court                 
  system does not  believe it is  effective in a typical  tort                 
  case.   Parties can presently engage in  arbitration if they                 
  wish to.  Virtually none of them do.                                         
                                                                               
  END:      SFC-96, #70, Side 1                                                
  BEGIN:    SFC-96, #70, Side 2                                                
                                                                               
  In response to a question from Co-chairman Halford asking if                 
  the  state  is  required  to  provide  counsel  to  indigent                 
  individuals   in   both  criminal   and  civil   cases,  Mr.                 
  Christensen explained that if                                                
  the law says an individual cannot  exercise his or her right                 
  to bring a case before a judge and a jury until "they go  to                 
  arbitration,"  the  state would  have  the duty  to  pay for                 
  arbitration if a person could not afford it.                                 
                                                                               
  Co-chairman Halford questioned whether mandatory arbitration                 
  was worth the $867.0.   Co-chairman Frank noted that Senator                 
  Taylor  included  the  provision when  the  bill  was before                 
  Senate Judiciary.   Senator Rieger voiced  his understanding                 
  that  when  the court  system  is budgetarily  squeezed, the                 
  civil liability  system suffers.   Part  of the  fiscal note                 
  probably  represents  "allowing people  to  get their  cases                 
  heard that, right now, are  languishing without ever getting                 
  to court," because  of time  delays in getting  them on  the                 
  docket.                                                                      
                                                                               
  Discussion of alternatives to mandatory arbitration followed                 
  among the Co-chairmen and Mr. Christensen.                                   
                                                                               
  Additional comments  followed by Mr.  Christensen concerning                 
  how  fiscal  note numbers  were developed  and the  share of                 
  arbitration  costs  to be  paid by  the  state on  behalf of                 
  indigent individuals.  Senator Rieger noted that fiscal note                 
  funding would  make the  court system  more accessible.   He                 
  suggested that  is a  different issue  than paying  for free                 
  counsel.                                                                     
                                                                               
  Co-chairman   Halford   directed   attention  to   mandatory                 
  arbitration language at  page 7, line 5,  and suggested that                 
  addition of "if requested  by one of the  parties" following                 
  the word "arbitration" would lessen impact.  Mr. Christensen                 
  advised  that he could not say what percentage of plaintiffs                 
                                                                               
                                                                               
  or defendants would  request arbitration.  If the judge were                 
  given the discretion  to decide  whether or not  arbitration                 
  would  be  valuable,  the  impact  on  the  state  would  be                 
  relatively minimal compared  to the  proposed bill.   Judges                 
  would likely not order  it in cases where the  parties could                 
  not afford the process.                                                      
                                                                               
  Mr. Christensen told members  that arbitrators in  Anchorage                 
  have indicated that the form of arbitration contained within                 
  the bill is  "about as expensive as arbitration can get."  A                 
  retired  judge  or  attorney is  needed  to  draft discovery                 
  orders and findings of fact and statements of law at the end                 
  of the process.  Co-chairman Halford voiced a preference for                 
  removing mandatory arbitration  from the bill.   Co-chairman                 
  Frank concurred.  Senator Rieger  expressed a preference for                 
  retaining  the provision but  preventing the  most expensive                 
  form.                                                                        
                                                                               
  Senator Rieger MOVED for passage of  SCS CSHB 158 (Fin) with                 
  individual recommendation and accompanying fiscal notes.  No                 
  objection  having  been  raised,  SCS  CSHB  158  (Fin)  was                 
  REPORTED OUT of committee  with a $0.8 fiscal note  from the                 
  Dept. of Commerce  and Economic Development; and  zero notes                 
  from  the Dept.  of Law,  Dept. of  Administration, and  the                 
  Court System.   (The Court  System note  indicated a  $862.0                 
  cost commencing  in 2001.)   All members present  signed the                 
  committee report with a "do pass" recommendation.                            
                                                                               
                                                                               
  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 referenced  correspondence                 
  from  the   Dept.  of  Commerce  and  Economic  Development,                 
  Amendment No. 1, and a draft SCS CSHB 335 (Fin) (9-LS1156\N,                 
  Utermohle, 3/27/96).                                                         
                                                                               
  Senator Rieger MOVED for adoption of  Amendment No. 1 to the                 
                                                                               
                                                                               
  "N"  version  of SCS  CSHB  335  (Fin) dated  3/27/96.   Co-                 
  chairman  Halford provided a  review of provisions contained                 
  within the amendment:                                                        
                                                                               
  Page 6, line 16:                                                             
  Eighteen  years  of age  is changed  to  21 for  the class-A                 
  assistant guide license.  This  individual would actually be                 
  in charge  of a  camp.   The license  is the  level below  a                 
  completely independent registered guide.  The age remains at                 
  18 for assistant guide entry into the profession.                            
                                                                               
  Page 6, line 21:                                                             
  A technical  change relating  to  assistant guiding  deletes                 
  "for  at  least three  seasons"  and substitutes  "during at                 
  least three  calendar years."   There  was need  for clarity                 
  concerning  whether  the  three  seasons  could occur  in  a                 
  calendar year.  Language thus reverted to original statutory                 
  language.                                                                    
                                                                               
  Page 10, lines 10, 19, 22, and 23-25:                                        
  The  first   change  at   line  10   relates  to   financial                 
  responsibility.    It is  unclear  whether a  licensed guide                 
  working  for  another guide  would  have to  carry insurance                 
  himself.   The amendment  clarifies that  the person  who is                 
  required  to   carry  insurance  and   proof  of   financial                 
  responsibility is the guide who has contracted the hunt.                     
                                                                               
  The change at  line 19 relates to need for  timely action on                 
  the part of the department when violations occur.                            
                                                                               
  Changes  at  lines 22  through 25  break  up areas  in which                 
  administrative   sanctions   apply.       Language    limits                 
  administrative  action  to  minor  infractions  while  court                 
  action applies to significant infractions.                                   
                                                                               
  Page 11, line 12:                                                            
  A  provision  is inserted  saying  that if  the  court takes                 
  action on  a license, the  department cannot take  action on                 
  the same license for the same infraction.                                    
                                                                               
  Page 14, line 27:                                                            
  A technical change in citation is made.                                      
                                                                               
  Page 16, after line 30:                                                      
  New language  allows the  department to  charge nonresidents                 
  two times the amount of the resident license fee.                            
                                                                               
  Co-chairman Halford noted that licensing of guides is funded                 
  from program receipts.  The additional cost assessed against                 
  nonresident  guides  reflects  costs  nonresidents  are  not                 
  paying for the management of lands  and resources as well as                 
  other management  costs associated  with the  process.   The                 
  two-to-one  ratio   does   not   nearly   cover   management                 
  expenditures by  Alaska residents  in which  nonresidents do                 
                                                                               
                                                                               
  not participate.  That  is the reason for the  difference in                 
  licensing fees.                                                              
                                                                               
  Brief discussion  followed between  Co-chairman Halford  and                 
  Senator Randy Phillips regarding  the age change from 18  to                 
  21.                                                                          
                                                                               
  Co-chairman Halford  called for objections to the amendment.                 
  No  objection  having  been  raised,  Amendment  No.  1  was                 
  ADOPTED.                                                                     
                                                                               
  Co-chairman  Frank MOVED for  passage of SCS  CSHB 335 (Fin)                 
  with accompanying fiscal  notes.   No objection having  been                 
  raised,  SCS CSHB  335 (Fin)  was REPORTED OUT  of committee                 
  with a  ($49.6) fiscal note from the Dept. of Fish and Game,                 
  a ($24.8) note from the Dept. of Public Safety, and a ($1.8)                 
  note from the  Dept. of  Commerce and Economic  Development.                 
  Co-chairmen Halford  and Frank signed  the committee  report                 
  with  a  "do  pass"  recommendation.   Senators  Rieger  and                 
  Phillips signed "no recommendation."                                         
                                                                               
                                                                               
  CS FOR HOUSE BILL NO. 272(FIN)                                               
                                                                               
       An  Act   relating  to  municipal  taxation   of  motor                 
       vehicles; and providing for an effective date.                          
                                                                               
  Co-chairman Halford directed that CSHB  272 (Fin) be brought                 
  on  for  discussion.   KIP  KNUDSON, aide  to Representative                 
  Hanley,  came  before committee.    He reference  a proposed                 
  amendment and noted  that interested parties would  speak to                 
  two issues therein:                                                          
                                                                               
       1.   Ability to dedicate funds                                          
       2.   The bureaucratic challenge of dedicating the funds                 
                                                                               
  The   bill   is   intended   to   provide   flexibility   to                 
  municipalities  with  regard  to  taxing  ability.   At  the                 
  present time,  only the  legislature can  establish taxation                 
  rates   on   motor   vehicles.     The   bill   would  allow                 
  municipalities  to raise  rates  internally.   It  is a  top                 
  priority  of the  municipal  league.    Municipalities  that                 
  contacted Representative  Hanley's office  are intending  to                 
  use the  measure as  a "net  zero" issue;  if motor  vehicle                 
  taxes are raised, the municipality will lower another tax.                   
                                                                               
  Mr. Knudson  acknowledged the  cooperation of  the Dept.  of                 
  Public Safety in developing the bill.                                        
                                                                               
  KEVIN RITCHIE  next came before  committee on behalf  of the                 
  Alaska Municipal League and Alaska Conference of Mayors.  He                 
  directed attention  to a letter  of support from  the league                 
  and stressed that the propose bill  is an important tool for                 
                                                                               
                                                                               
  municipalities for the  future.  Municipalities do  not plan                 
  large  increases in  the  tax rate.    In  the case  of  the                 
  Municipality of Anchorage, "This is within their tax cap."                   
                                                                               
  JUANITA HENSLEY,  Chief, Driver Services, Division  of Motor                 
  Vehicles, Dept. of  Public Safety, came before  committee to                 
  respond to questions.                                                        
                                                                               
  Senator Rieger  MOVED for  adoption of Amendment  No. 1  and                 
  requested unanimous consent.  Both  Senator Phillips and Co-                 
  chairman Halford noted questions and  asked that the sponsor                 
  speak to the amendment.  Senator Rieger  remarked that roads                 
  in  his  area are  paid  for  by a  property  tax assessment                 
  applied   to   road   servicing.      He   then   referenced                 
  correspondence  from the  Mayor  of  Anchorage  saying  that                 
  passage of the proposed bill would "help communities solve a                 
  nagging problem--which is road maintenance costs."                           
                                                                               
  Senator Rieger voiced his understanding  that the bill would                 
  allow municipalities to raise taxes on residents residing in                 
  road service areas, but there  is no mechanism for  ensuring                 
  that the money being  raised would go to road  service areas                 
  in which  taxpayers reside.  Instead, it represents one more                 
  example of a tax imposed on outlying parts of a municipality                 
  to support the core.  The  legislature must ensure equitable                 
  distribution of  revenues raised  for a  particular purpose.                 
  The proposed amendment would help ensure that the purpose is                 
  fulfilled.                                                                   
                                                                               
  Co-chairman Halford advised  of those who would  prefer that                 
  moneys be allocated  back against  property taxes "that  pay                 
  all  the  bills   for  everyone   else."    Senator   Rieger                 
  acknowledged  the  validity  of that  preference.    The Co-                 
  chairman  voiced   his  understanding   that  every   dollar                 
  increase, as a result  of the proposed bill, would  have "to                 
  come  off  of   property  taxes"  in  the   Municipality  of                 
  Anchorage.  Mr. Knudson concurred in that understanding.                     
                                                                               
  Discussion  followed concerning  allocation of  taxes, using                 
  the Municipality of Anchorage as an example.  Senator Rieger                 
  reiterated  that  the  bill  could  result  in  taxation  of                 
  outlying areas for the  purpose of tax relief for  the core.                 
  Mr. Knudson acknowledged that while that could happen, it is                 
  up to  each municipality to  "fix that  inequity."   Senator                 
  Rieger noted  that  Amendment No.  1  provides a  degree  of                 
  comfort.  He voiced  a lack of confidence in  application of                 
  the bill  by the  Anchorage municipality.   He  referenced a                 
  clear division on the assembly between Eagle River and South                 
  Anchorage  and the "rest of the town."   He suggested that a                 
  Chugach, Eagle  River, or  South Anchorage legislator  could                 
  not  in  good  conscience  allow the  proposed  bill  to  go                 
  forward.                                                                     
                                                                               
  Mrs.  Hensley described  the  present  system of  department                 
                                                                               
                                                                               
  collection   of   motor   vehicle   taxes   on   behalf   of                 
  municipalities.  She  stressed that the department  does not                 
  track road service  areas in  which vehicle are  registered.                 
  That would be a new function not previously performed by the                 
  department,  and additional  computer  programming would  be                 
  required.  Senator Rieger voiced  his understanding that the                 
  department's responsibility is simply to remit moneys to the                 
  municipality  rather  than to  allocate  it service  area by                 
  service area.    Passage of  the  proposed bill  should  not                 
  impact the department.   Mr.  Knudson advised of  indication                 
  that the  municipality would  be saddled  with the  computer                 
  work  associated  with   allocation.    Municipalities  have                 
  advised that it would be difficult and "quite a  challenge."                 
                                                                               
                                                                               
  Co-chairman  Halford  suggested  that  Amendment  No.  1  be                 
  reworded  to say that "money received  shall be allocated to                 
  area-wide services or  tax relief."  Moneys would  thus flow                 
  to the base and  reduce property taxes rather than  apply to                 
  the  downtown service  area or  other service  areas.   That                 
  approach   might   protect  against   negative  application.                 
  Senator Rieger concurred in the approach but voiced need  to                 
  use appropriate  terminology  for area-wide,  so that  outer                 
  perimeters of  municipalities would  be included.   He  then                 
  MOVED for adoption of a conceptual amendment providing that:                 
                                                                               
       money received by  an increase under  this section                      
       shall be used  to reduce the tax mill rate equally                      
       across the entire borough                                               
                                                                               
  Mr. Knudson  expressed concern  that the  foregoing language                 
  might not provide the flexibility sought by  municipalities.                 
                                                                               
                                                                               
  Co-chairman Halford called for objections  to the conceptual                 
  amendment.  No objection having  been raised, the conceptual                 
  amendment was ADOPTED in lieu of Amendment No. 1.                            
                                                                               
  END:      SFC-96, #70, Side 2                                                
  BEGIN:    SFC-96, #71, Side 1                                                
                                                                               
  Discussion  of biennial  licensing followed  between members                 
  and Juanita Hensley.   Both Co-chairman Halford  and Senator                 
  Phillips expressed concern that doubling  the annual cost in                 
  addition  to  increased motor  vehicle  taxes that  might be                 
  levied  by  a   municipality  would  result  in   a  "hefty"                 
  registration  fee.      Co-chairman   Frank   stressed   the                 
  convenience  associated  with   biennial  licensing.    Mrs.                 
  Hensley voiced department  support for both  HB 272 and  Co-                 
  chairman Frank's biennial licensing bill.                                    
                                                                               
  Co-chairman Frank MOVED  for passage of  SCS CSHB 272  (Fin)                 
  with individual  recommendations.  No  objection having been                 
  raised, SCS  CSHB 272  (Fin) was REPORTED  OUT of  committee                 
                                                                               
                                                                               
  with a $44.5 fiscal note from the Dept. of Public Safety and                 
  a  zero  note  from  the Dept.  of  Community  and  Regional                 
  Affairs.  Co-chairman Frank signed the committee report with                 
  a  "do  pass"  recommendation.    Co-chairman  Halford   and                 
  Senators Phillips and Rieger signed "no recommendation."                     
                                                                               
                                                                               
  SENATE CONCURRENT RESOLUTION NO. 29                                          
                                                                               
       Objecting  to  the Department  of Administration's                      
       settlement  with certain  employees of  the Alaska                      
       marine highway system.                                                  
                                                                               
  Co-chairman Halford directed  that SCR 29 be  brought on for                 
  discussion  and referenced a  draft committee substitute (9-                 
  LS1829\G,  Cramer, 4/9/96).    TED  POPELY, Senate  Majority                 
  Aide,  came  before  committee.     He  explained  that  the                 
  resolution  registers  general objection  to  the settlement                 
  agreement entered  between employee  members  of the  Alaska                 
  Marine Highway System and the  Dept. of Administration.   It                 
  calls  for  the  attorney  general   to  appoint  a  special                 
  investigator  to  investigate the  actions  of the  Dept. of                 
  Administration  with respect  to the  settlement, especially                 
  with  regard  to  potential  ethical  violations  under   AS                 
  39.52.120.  The resolution objects to the settlement  on the                 
  grounds  that  it was  entered  into inappropriately  by the                 
  Dept.  of  Administration because  AS  23.40.215(a)  and (b)                 
  require  legislative  approval   of  collective   bargaining                 
  agreements.                                                                  
                                                                               
  Co-chairman   Halford   termed    the   resolution    "self-                 
  explanatory."  Senator Randy Phillips  MOVED for adoption of                 
  CSSCR 29 (Finance).  No objection  having been raised, CSSCR                 
  29 (Finance) was ADOPTED.  Senator Phillips then  MOVED that                 
  CSSCR  29 (Finance)  pass  from  committee  with  individual                 
  recommendations.  No objection having  been raised, CSSCR 27                 
  (Finance) was REPORTED  OUT of committee with  a zero Senate                 
  Finance fiscal  note  for the  Dept.  of Law.    Co-chairmen                 
  Halford and Frank  and Senators  Phillips and Rieger  signed                 
  the committee report with a "do pass" recommendation.                        
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting was adjourned at approximately 3:35 p.m.                         
                                                                               

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