Legislature(1995 - 1996)
04/30/1996 10:40 PM Senate FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
MINUTES SENATE FINANCE COMMITTEE April 30, 1996 10:40 p.m. TAPES SFC-96, #105, Side 1 (000-575) SFC-96, #105, Side 2 (575-050) CALL TO ORDER Senator Rick Halford, Co-chairman, reconvened the meeting at approximately 10:40 p.m. PRESENT All committee members (Co-chairmen Halford and Frank and Senators Donley, Phillips, Rieger, Sharp, and Zharoff) were present. ALSO ATTENDING: Laurie Otto, Deputy Attorney General, Criminal Division, Dept. of Law; Wendy Redman, Vice- president for University Relations, University of Alaska; Geron Bruce, Legislative Liaison, Dept. of Fish and Game; Tom Williams, aide to Co-chairman Frank; Fred Fisher and Kathryn Daughhetee, fiscal analysts, Legislative Finance Division; and aides to committee members and other members of the legislature. SUMMARY INFORMATION SB 215 - OMNIBUS STATE AGENCY OPERATIONS & PROGRAM Discussion was had with Wendy Redman. Amendments 1, revised 6, 7, 8, 9, 11, and 12 as amended, were ADOPTED. CSSB 215 (Fin) was REPORTED OUT of committee with a Dept. of Revenue (Treasury) note showing revenues of $7,065.0; a ($720.0) Dept. of Fish and Game note; a ($5.3) Dept. of Commerce and Economic Development note; and zero notes from the Dept. of Natural Resources and Dept. of Revenue (Income/Excise). SB 265 - RECEIPTS OF TEST FISHING OPERATIONS Testimony was presented by Tom Williams. CSSB 265 (Fin) was REPORTED OUT of committee with a ($7,731.4) fiscal note from the Office of Management and Budget, applied to various departments. SENATE BILL NO. 265 An Act relating to receipts of commercial fisheries test fishing operations; and providing for an effective date. Co-chairman Halford directed that SB 265 be brought on for discussion. Co-chairman Frank referenced a draft CSSB 265 (Fin) (9-LS1614\F, Utermohle, 4/29/96) and explained that he worked with the department to expand the definition of "program receipts" to accommodate a list of revenue neutral "restricted program receipts." The intent is not to unintentionally cut (from the budget) operations that are self-supporting and not dependent upon general funds. The proposed draft accomplishes that. Co-chairman Frank next noted that the draft was also intended to cover the commercial test fishery contained in the original bill. The Office of Management and Budget has since indicated that specific language relating to the fishery must be added to the draft. Co-chairman Frank thus referenced a proposed amendment dated 4/30/96. He then MOVED for adoption of CSSB 265 ("F" version, dated 4/29/96) including the commercial fisheries test fishing amendment as a technical correction. No objection having been raised, CSSB 265 (Fin) was ADOPTED with the accompanying commercial fisheries test fishing amendment. Co-chairman Frank MOVED that CSSB 265 (Fin) pass from committee with individual recommendations and accompanying fiscal notes. The Co-chairman subsequently remarked that the fiscal note should be revised to reflect a change in funding source from general funds to restricted program receipts. Senator Sharp raised a question concerning listings that have not yet been authorized. Co-chairman Frank acknowledged that the list reflects items in the budget request. Items would have to be authorized in budget documents. Mere listing on an attachment to the fiscal note does not provide that authority. TOM WILLIAMS, aide to Co- chairman Frank, further advised that the list was prepared by the Office of Management and Budget. It merely lists everything funded from designated program receipts and sets forth potential items that could be impacted. Co-chairman Halford called for objections to passage of the bill. No objection having been raised, CSSB 265 (Fin) was REPORTED OUT of committee with a ($7,731.4) note from the Office of Management and Budget to be applied to various departments. Co-chairmen Halford and Frank and Senator Zharoff signed the committee report with a "do pass" recommendation. Senators Donley, Phillips, Rieger, and Sharp signed "no recommendation." SENATE BILL NO. 215 An Act streamlining the functions of state government, including authorizing the commissioner of fish and game to award grants for certain resource activities; allowing agents selling fish and game licenses and tags to retain certain compensation; authorizing the Department of Health and Social Services to award grants for certain services for developmentally delayed or disabled children; relating to rabies control and administration of flour and bread standards by the Department of Environmental Conservation; repealing the Athletic Commission, the regulation of boxing and wrestling, the certification of professional geologists, and the Water Resources Board; repealing certain filing statements and bonds for enforcement and collection of certain taxes; and providing for an effective date. Co-chairman Halford directed that SB 215 be brought back before committee for discussion, referenced Amendment No. 6, and asked that Wendy Redman speak to the amendment. WENDY REDMAN, Vice-president, Statewide University System, University of Alaska, came before committee. She explained that current law does not allow an employer to require automatic deposit for employee pay. The proposed amendment would allow the University to impose that requirement. The intent is to establish a program with an option that allows for employees who have no bank accounts. The program would thus not be absolutely mandatory. Approximately 42 percent of University employees now utilize automatic deposit. The hope is to increase usage to 70 percent. University accountants believe in excess of $100.0 a year can be saved through use of automatic deposit. Senator Zharoff expressed concern that perhaps those with bank accounts may not wish to use that process. He questioned the wisdom of mandating use. Ms. Redman noted that 60 percent of University employees have bank accounts. She acknowledged that many choose to receive a pay check and do their own banking. She suggested that that ritual is very expensive. It costs a considerable amount to write the checks and distribute them throughout the system. The University seeks to save that money and put it into programs. Senator Rieger asked if the proposed amendment would effect a change for all employers or merely the University. Ms. Redman replied, "This changes the law for all employers," but it does not require it for all employers. The issue would have to be bargained with collective bargaining units. The Dept. of Administration asked that language ensure that "It was optional for everyone else." Co-chairman Frank sought further clarification of applicability. Ms. Redman said the statute only applies to public employers. It would remain optional for all other employers. Co-chairman Frank sought additional clarification concerning whether the change would be limited to public employers. Discussion followed regarding those with accounts at brokerage houses and whether language was sufficiently broad to cover a variety of accounts. Ms. Redman responded affirmatively, advising that the University presently accommodates distribution of an employee's pay to up to six accounts. She reiterated that the University policy would provide exceptions for those who do not have bank accounts. Co-chairman Halford observed that a reading of AS 23.10 indicates the proposed amendment would apply to all employers, including private employers. Ms. Redman stressed that it would be optional. Co-chairman Halford said that existing law is optional. The proposed amendment would allow an employer to require direct deposit. Senator Zharoff asked if the title would require a change to accommodate application to private employers. Co-chairman Halford directed attention to a draft CSSB 215 (Fin) (9-GS2023\M, Cook, 4/30/96) and explained that it incorporates amendments (2 through 5) previously adopted by committee at the April 23, 1996, meeting. Senator Sharp MOVED for adoption of CSSB 215 (Fin) dated 4/30/96. No objection having been raised, CSSB 215 (Fin) was ADOPTED. The Co-chairman then queried members regarding disposition of Amendment No. 6. Wendy Redman suggested that if the committee is uncomfortable in applying amendment provisions to all Alaskan employers, she would redraft the language under AS 14.40 (statutes applying to the University) in a way that would allow the University to impose the requirement. Co-chairman Frank concurred in need for narrow application. He then MOVED to WITHDRAW Amendment No. 6. Co-chairman Halford explained that Amendment No. 7 contains language similar to that adopted in the unincorporated community grant act with the exception that amendment language contains a two-year sunset and would only apply to July 1, 1998. Court cases challenging state jurisdiction and authority will, hopefully, be decided by that time. Senator Sharp MOVED for adoption of Amendment No. 7. Senator Zharoff OBJECTED. Co-chairman Halford called for a show of hands, and Amendment No. 7 was ADOPTED on a vote of 6 to 1. Co-chairman Halford explained that Amendment No. 8 deals with lobbying contracts by state entities. Co-chairman Frank MOVED for adoption. Senator Rieger raised a question concerning salaried employees who also register as lobbyists and whether they would be prohibited from working on projects. He pointed specifically to Page 1, line 23, of the amendment and cited the following language as problematic: (1) 'contract with' includes hiring as an employee; Co-chairman Halford agreed that the definition appears overly board. Several suggestions of alternative language were offered by both Co-chairmen. Co-chairman Frank stressed that the legislature is interested in hearing from the executive director and other corporate or agency people who are knowledgeable about programs. The committee is not interested in hearing from "the hired gun that's been hired specifically to come down here and communicate." Senator Zharoff asked how suggested language would impact legislative liaisons. Co-chairman Halford explained that it would depend upon whether liaison work is full time or incidental to the remainder of the employee's full time occupation. It would prohibit agencies from contracting with someone to lobby if lobbying was all the individual did. The Co-chairman pointed to the representative from the Alaska Permanent Fund who comes before the legislature. The individual also deals with other communication and information functions for the corporation. Co-chairman Frank suggested that the focus of the amendment is not hired employees, but contracts with lobbyists who also represent "a host of other clients." Co-chairman Halford suggested insertion of "does not include hiring as a full-time employee" in lieu of "includes hiring as an employee." Co-chairman Frank MOVED for adoption. Senator Rieger concurred in the foregoing as long as it is not construed "that you had to use the full-time employee strictly for lobbying the legislature." Senator Rieger then suggested the following amendment to Amendment No. 8: Page 1, line 23: Following 'contract with' Delete: includes hiring as an employee Insert: does not include regular employment Co-chairman Frank WITHDREW his motion. Senator Rieger then formally MOVED for adoption of the foregoing amendment to Amendment No. 8. No objection having been raised, the amendment to Amendment No. 8 was ADOPTED. Co-chairman Halford called for objections to adoption of Amendment No. 8. No objection having been raised, Amendment No. 8 was ADOPTED. Co-chairman Halford advised that Amendment No. 9 relates to procurement by the Alaska Railroad. Co-chairman Frank MOVED for adoption. No objection having been raised, Amendment No. 9 was ADOPTED. Co-chairman Halford next directed attention to Amendment No. 10. Senator Sharp explained that the amendment would extend present subsistence law scheduled to expire this fall. Co- chairman Halford voiced need to review pertinent session law relating thereto. Senator Zharoff asked that committee discussion revert to consideration of Amendment No. 1 and MOVED that the committee rescind its earlier action failing to adopt the amendment. Co-chairman Halford advised that he had no objection to the motion to rescind but advised he remained opposed to the amendment which would provide grant authority to the Dept. of Fish and Game. He then asked that staff from the department speak to both Amendments 1 and 10. GERON BRUCE, Legislative Liaison, Dept. of Fish and Game, came before committee. END: SFC-96, #105, Side 1 BEGIN: SFC-96, #105, Side 2 Mr. Bruce explained that subsistence law was extended last year and is again scheduled to expire in October of 1996. It thus requires extension this year as well. The department supported extension last year and would again support a simple extension with no changes. Co-chairman Halford voiced his understanding that the intent of Amendment No. 10 would be to repeal the sunset without making any other changes in subsistence law. Senator Sharp concurred, adding that he would not object to establishment of another sunset. LAURIE OTTO, Deputy Attorney General, Dept. of Law, next came before committee. She voiced her understanding that legislative attorneys have advised that the proposed bill violates the constitutional single-subject provision. When the original bill relating to streamlining of state government was introduced, the Dept. of Law took the position that it would withstand constitutional scrutiny. Amendments offered and adopted by committee involving banking for University employees, subsistence, funding for tribal entities, and lobbying activities place the bill in violation of constitutional provisions. The net result will be that the entire bill and all its provisions would be struck down by the courts. While the state has never struck down law on that basis, there has never before been a law as broad and touching on so many subjects. Ms. Otto cautioned that the committee appears to be adding provisions relating to "groups that are particularly litigious." She expressed concern that the committee was spending much time on a piece of legislation containing important provisions but which was being set up to be stuck down by the courts. She said the Dept. of Law has now joined the opinion expressed by legislative attorneys and has reach the conclusion that the bill, as amended during the present meeting, is unconstitutional. In response to a comment by Co-chairman Halford, Ms. Otto explained that the title does not put the public on notice of what the bill addresses. Amendments have resulted in a bill that does not withstand constitutional scrutiny. That has nothing to do with the merits of the amendments. Co-chairman Frank asked that the meeting be briefly recessed. RECESS - 11:10 P.M. RECONVENE - 11:20 P.M. Co-chairman Halford again referenced Amendment No. 10. He then noted repealers covering an "amazing array" of titles and statutes (incorporated within the bill as introduced by the Governor) and acknowledged that additional amendments "stretch it even further." Senator Sharp advised of his understanding that legislation extending subsistence law is pending in House Rules. He then WITHDREW Amendment No. 10. Co-chairman Halford then referenced Senator Zharoff's motion to rescind action failing to adopt Amendment No. 1 and called for objections. Senator Zharoff explained that the amendment would provide the Dept. of Fish and Game authority to work with private landholders or other entities to restore fish habitat. Geron Bruce said that provisions within the amendment were prompted by legislative appropriation of two sources of funding for work on the Kenai River. A portion of the money was to be used to work with private land owners on demonstration grants on land fronting the Kenai. The effort was to protect habitat. In the process of administering the program, the department found it did not have grant authority and thus had to go to a third party for award. The proposed amendment would provide the department with ability to directly award grants in areas where the legislature appropriated money for specific grant purposes. Mr. Bruce said he worked on the language with Senate President Drue Pearce as well as members of the Senate Resources Committee. Wording is intended to be limiting and maintain legislative oversight. Senator Sharp voiced his recollection that revised, more narrowly tailored language was to be developed rather than reverting to Amendment No. 1. He said he objected to the broad nature of authority that covers delegation of management. He advised he had no objection to habitat improvement efforts involving private land owners or other organizations. Original language appeared to delegate everything the Dept. of Fish and Game could do through grants. Mr. Bruce said that the intent was that control and direction of funds would occur in the appropriation process. Authorizing language was then to be sufficiently broad to reach "a number of the kinds of things that the department did, if you so desired." SENATE PRESIDENT DRUE PEARCE next came before committee. She explained that the legislature appropriated $1 million in federal receipts and a match from EVOS moneys for Kenai River habitat projects. In the appropriation for federal receipts, subsection language said the Dept. of Fish and Game could make a transfer of grants directly to the Kenai Peninsula Borough for demonstration projects on private land. The borough subsequently had difficulty with an ordinance relating to Kenai River management. In the end, the borough did not have direct authority to accomplish the projects, and language within the appropriation bill did not permit the Dept. of Fish and Game to conduct the projects. The proposed amendment would allow grants for approved projects to be made directly to private land owners. Further discussion followed regarding citations for the above-referenced Kenai River projects. Laurie Otto again cautioned regarding violation of the constitutional single- subject provision. Co-chairman Halford acknowledged that the committee and legislative attorneys would have to work on an all-inclusive, single-subject title. He further acknowledged that items may have to be removed from the bill if it is to be workable. Referencing concern by Senator Sharp regarding the broad nature of amendment language, Senator Pearce noted that it is "much less broad" than language removed from the bill when it was in Senate Resources Committee. Senator Donley MOVED for adoption of a conceptual amendment to Amendment No. 1 that would limit authority to the two, specifically cited, appropriations for Kenai River projects. Senator Zharoff asked if the conceptual amendment would make language too restrictive for the original intent of Amendment No. 1. Mr. Bruce responded negatively. He noted an immediate need to deal with funds relating to the Kenai River. He then voiced his belief that the concept embodied within Amendment No. 1 could be applicable to a broader range of projects, subject to legislative appropriation. The department would like to have that authority. Co- chairman Halford asked that the conceptual amendment contain leeway to utilize date restrictions should SLA citations prove to be a problem. He stated that the intent is to deal with specifically noted appropriations and not create the broad authority embodied in the original amendment. He then called for objections to the conceptual amendment. No objection having been raised, the conceptual amendment to Amendment No. 1 was ADOPTED. Co-chairman Halford next queried members regarding action on Amendment No. 1. He explained that, as amended, it would authorize the department to make grants from the two funding sources defined by SLA citations, statute numbers, or specific dates. No objection having been raised, Amendment No. 1 was ADOPTED as amended. Co-chairman Frank asked that committee attention revert to Revised Amendment No. 6. He explained that it would now be limited to the University, and an employee would have the right to request an exemption from the direct deposit requirement. In response to a question from Senator Randy Phillips, Wendy Redman explained that when the University hires a new employee, information relating to direct deposit and exemptions would become part of the normal paperwork. Existing employees would be sent correspondence notifying them of the change and furnishing an exemption form should they choose to make that request. Ms. Redman reiterated that the University would not have requested the change if substantial cost savings were not to accrue. Co-chairman Frank formally MOVED for adoption of Revised Amendment No. 6. Co-chairman Halford voiced his OBJECTION, and then called for a show of hands. The motion CARRIED, and Revised Amendment No. 6 was ADOPTED. Senator Sharp MOVED for adoption of Amendment No. 11. He explained that it would fall within the title and allow a vendor of fish and game licenses to assign compensation earned as an agent to a non-profit fish or game association and to notify the Dept. of Fish and Game of such action. The commissioner would retain 25 percent of the assigned compensation for costs associated with assignment. The 25 percent would flow to the "regular state fish and game fund." Senator Rieger voiced his understanding that moneys would accrue to the fund that could be used for the broadest range of activities. Senator Sharp concurred. Co-chairman Halford noted his OBJECTION. No further objection having been raised, the Co-chairman advised of ADOPTION of Amendment No. 11 on a vote of 6 to 1. Geron Bruce referenced Page 7, line 27, of CSSB 215 (Fin) and noted need to delete a repealer (AS 16,05.390(c)) relating to Amendment No. 11. Co-chairman Halford queried members regarding objection to deletion of the repealer as a conforming amendment to Amendment No. 11. No objection having been raised, reference to "AS 16.05.390(c)" was deleted from Section 17 of the bill. Co-chairman Frank directed attention to Amendment No. 12 which he explained relates to annual six-year plans within the Dept. of Education. He further acknowledged a proposed amendment to Amendment No. 12, by Senator Donley, and explained that it relates to unhoused students. Co-chairman Frank then MOVED for adoption of Amendment No. 12 and requested unanimous consent. Senator Donley MOVED for adoption of his amendment to Amendment No. 12. In response to a question from Senator Zharoff, Senator Donley explained that his amendment to the amendment contains the exact language adopted by committee for incorporation within SB 244. It requires that students in temporary, relocatable facilities be counted as unhoused, statewide. Co-chairman Halford called for objections to adoption. No objection having been raised, the amendment to Amendment No. 11 was ADOPTED. Co-chairman Halford next voiced his OBJECTION to Amendment No. 12 and asked if there were additional objections. No further objection having been raised, Co-chairman Halford declared Amendment No. 12 ADOPTED on a vote of 6 to 1. Senator Donley remarked that when SB 244 was sent to the House, it contained a provision regarding equal reimbursement for transportation. He then voiced his understanding that it was subsequently removed and said it now appears that something intended to provide fairer reimbursement has been turned "into an even worse negative." The Senator advised that he was considering offering an amendment that would create a maximum differential between school districts for reimbursement of pupil transportation per the following language: Any differential between school districts in the level of reimbursement for transportation provided by a school district shall not exceed 10 percent. That would provide a range within which the department could work, based on actual costs, but the department could not exceed 10 percent in discriminating among school districts for expenses. Senator Rieger voiced his understanding that the foregoing language would not relate merely to the differential between private and public bus transportation within a district but to all reimbursement statewide. Senator Donley concurred. Co-chairman Frank remarked on need to attend the upcoming floor session and referenced need for substantive discussion with the Dept. of Education prior to taking action on reallocation of transportation moneys. Senator Donley said he would not offer the amendment at this time. Co-chairman Halford voiced support for the language, but suggested that Senator Donley find a different vehicle. Co-chairman Frank MOVED for passage of CSSB 215 (Fin) with individual recommendations and appropriate fiscal notes. No objection having been raised, CSSB 215 (Fin) was REPORTED OUT of committee with a Dept. of Revenue (Treasury) note showing revenues of $7,065.0; a ($720.0) Dept. of Fish and Game note; a ($5.3) Dept. of Commerce and Economic Development note; and zero notes from the Dept. of Natural Resources and Dept. of Revenue (Income/Excise). Co-chairman Frank and Senator Sharp signed the committee report with a "do pass" recommendation. Co-chairman Halford and Senators Donley and Phillips signed "no recommendation." Senator Rieger indicated need for amendment, and Senator Zharoff signed "do not pass (Titanic)." ADJOURNMENT The meeting was adjourned at approximately 12:00 midnight.