Legislature(1999 - 2000)

03/26/1999 09:45 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
SENATE FINANCE COMMITTEE                                                                                                        
March 26, 1999                                                                                                                  
9:45 AM                                                                                                                         
SFC-99 # 67, Side A                                                                                                             
CALL TO ORDER                                                                                                                   
The first portion of the meeting was held on the Balance                                                                        
Budget discussions.  Minutes for that portion are separate.                                                                     
Co-Chair John Torgerson reconvened the meeting at                                                                               
approximately 9:45 AM.                                                                                                          
Senator John Torgerson, Senator Sean Parnell, Senator Randy                                                                     
Phillips, Senator Dave Donley, Senator Loren Leman, Senator                                                                     
Gary Wilken, Senator Al Adams and Senator Lyda Green.                                                                           
Also Attending:                                                                                                                 
DOUG GARDNER, Assistant Attorney General, Oil, Gas and                                                                          
Mining Section, Civil Division, Department of Law.                                                                              
SUMMARY INFORMATION                                                                                                             
SJR  9-CONST. AM: WAYS AND MEANS BILLS                                                                                          
Senator Dave Donley testified to the bill.  It was held in                                                                      
SB  51-LICENSING OF COSMETOLOGISTS                                                                                              
This bill was reported out of committee with a new fiscal                                                                       
HJR 12-NO FED. CLAIM ON STATE TOBACCO SETTLEMENT                                                                                
The committee heard testimony from the sponsor and the                                                                          
Department of Law.  The committee amended the bill and                                                                          
moved it from committee.                                                                                                        
SENATE JOINT RESOLUTION NO. 9                                                                                                   
Proposing amendments to the Constitution of the State                                                                           
of Alaska relating to ways and means bills.                                                                                     
This was the first hearing for this bill, which was                                                                             
sponsored by the Senate Finance Committee.                                                                                      
Senator Dave Donley spoke to the bill, saying it was a                                                                          
simple concept that would provide a third exceptions to the                                                                     
single subject bill.  Currently there were two exceptions,                                                                      
a reviser bill and an appropriations bill. This would add                                                                       
an exception for a ways and means bill. Ways and means                                                                          
bills would be confined to changes in the law determined by                                                                     
the Legislature to be necessary to implement                                                                                    
appropriations. The idea was that in a downward budgetary                                                                       
cycle, many of the changes the Legislature had to achieve                                                                       
to reduce state expenditure had to be done in the statutes.                                                                     
They could not simply be done through the budget document.                                                                      
It was very complicated because the budget cycle and the                                                                        
bill cycle were different.  Without this legislation, every                                                                     
change in statute that was necessary would need to be done                                                                      
with independent bills because of the single-subject rule.                                                                      
All the dollar amounts were implemented in a single                                                                             
appropriation bill. This would allow a single ways and                                                                          
means bill to implement the complementing changes in the                                                                        
budget bill.                                                                                                                    
The real problems was that the budget cycle was difference                                                                      
than the legislative cycle in that the legislation had two                                                                      
years to work through the process. It was difficult for one                                                                     
bill to be blocked by a single committee and held up, while                                                                     
the budget bill still proceeds. If the ways and means                                                                           
legislation doesn't make it through the process, then the                                                                       
budget bill won't work any more. What happens is most of                                                                        
the cuts just don't get made.                                                                                                   
He continued saying, "You can't have an efficient way of                                                                        
looking at the budget and really downsizing state                                                                               
government from a programmatic point of view."  What was                                                                        
left would be budgets that simply cut across the board and                                                                      
all the same programs were still preserved in statute. That                                                                     
was not an efficient way to deal with downsizing spending.                                                                      
He qualified that there would be a danger of abuse by the                                                                       
Legislature, but he felt the same danger existed on other                                                                       
levels and the Legislature was responsible enough to not                                                                        
abuse those.  This would allow more important programs to                                                                       
be run efficiently while less important programs were                                                                           
Co-Chair John Torgerson agreed with the bill but had                                                                            
concerns with the special session provision feeling that it                                                                     
may lead to lengthy sessions.  Senator Dave Donley had                                                                          
discussed the matter with the drafters. It was hard to know                                                                     
the exact circumstances with the special sessions. There                                                                        
may be times when the Legislature wanted that tool                                                                              
available. If a ways and means bill had failed in regular                                                                       
session but the budget bill passed, the special session                                                                         
would be a way for the body to come back and readdress the                                                                      
Senator Sean Parnell had given it thought also.  The                                                                            
language in Section 1 detailing special sessions only dealt                                                                     
with those called by the Governor.  The previous sentence                                                                       
detailed how special sessions could be called by the                                                                            
Governor or by a vote of two-thirds of the Legislature. He                                                                      
wondered if there a reason it was limited to a special                                                                          
session called by the Governor.                                                                                                 
Senator Dave Donley replied that reason it was applied to                                                                       
specific special sessions called by the governor was                                                                            
because the Governor set the perimeter of those special                                                                         
session. However, the Legislature itself may need to                                                                            
address the ways and means items, so this would give the                                                                        
Legislature the authority to do that even if the Governor                                                                       
did not issue a call. If the Legislature called the special                                                                     
session, it could place the ways and means bill on the                                                                          
agenda. The Governor could then not preclude the                                                                                
Legislature from considering the matter.                                                                                        
Co-Chair John Torgerson asked if, with the two-thirds vote                                                                      
requirement, could a member of the Legislature hold out                                                                         
their vote unless a concession was made for a separate,                                                                         
unrelated item to be added to the ways and means bill.  He                                                                      
wondered if that could jeopardize the vote on a special                                                                         
session. Senator Dave Donley felt that was always a concern                                                                     
with the special session vote.  However, the Legislature                                                                        
had only called itself back into a special session twice in                                                                     
the past. So he didn't think it would be any more of a                                                                          
problem than with other subject matters.                                                                                        
Senator Sean Parnell then asked for clarification that this                                                                     
section was in no way meant to preclude or limit the                                                                            
Legislature's ability to include a ways and means bill,                                                                         
should the Legislature call itself into special session.                                                                        
Senator Dave Donley affirmed.                                                                                                   
Senator Sean Parnell made comments asking why would the                                                                         
Legislature want to have ways and means bill during a                                                                           
special session because that could complicate matters and                                                                       
the special session may never successfully adjourn. He                                                                          
posed a scenario where the Legislature passed a budget and                                                                      
a related ways and means bill, but the Governor vetoed                                                                          
both. He did not want to limit the Governor's ability to                                                                        
call a special session on a budget matter without a ways                                                                        
and means bill. He assumed the ways and means bill would                                                                        
have to be vetoed in its entirety and therefore the                                                                             
Governor may wish to call a special session to negotiate                                                                        
the ways and means bill.                                                                                                        
Senator Dave Donley responded saying that was a thought                                                                         
process that went into this provision.  If the Governor did                                                                     
veto and then didn't put it in the call for a special                                                                           
session, the Legislature would be left with the dilemma to                                                                      
either override the veto or do nothing. He suggested                                                                            
considering adding a provision to give middle ground                                                                            
Co-Chair John Torgerson commented that a ways and means                                                                         
bill would not necessarily have to be acted upon during a                                                                       
special session. It would be treated the same as any other                                                                      
bill as far as the process was concerned. That made him                                                                         
more comfortable. He could see the advantages of using a                                                                        
special session to address a ways and means bill.                                                                               
Senator Al Adams noted that the way this was written the                                                                        
ways and means bill would have a broad title.  He felt that                                                                     
in doing this legislation, the Legislature was going in the                                                                     
opposite direction.  He wanted to have former Governor Jack                                                                     
Coghill and Judge Tom Stewart, who served on the                                                                                
constitutional convention to scrutinize the bill and give                                                                       
suggestions.  Senator Al Adams thought this bill would set                                                                      
the state up for abuse in the form of riders added to a                                                                         
ways and means bill. He believed ways and means bills                                                                           
should be contained in a single subject to prevent                                                                              
unrelated materials added to the process. If a single                                                                           
subject provision was not inserted, he suggested adding a                                                                       
new Section 15 that was in the constitution so the Governor                                                                     
could strike the riders in a line item veto capacity.                                                                           
Senator Al Adams noted that there would be changes to                                                                           
political parties in control of state government.                                                                               
Therefore, there needed to be a safeguard to allow the                                                                          
Governor the power to veto rider items.                                                                                         
Senator Dave Donley thought that was Senator Al Adams was                                                                       
saying was that the Governor had line item veto power on                                                                        
appropriation bills and perhaps the Governor should have                                                                        
the power to do same with a ways and means bill as well.                                                                        
Senator Al Adams affirmed. Senator Dave Donley said the                                                                         
Governor could have this ability to make the budget and the                                                                     
ways and means bills balance.  He felt the committee should                                                                     
have a discussion on that point.                                                                                                
Senator Sean Parnell wanted to know if the President of the                                                                     
US had that authority.  Senator Dave Donley replied that                                                                        
the President of the US did not and in fact, had fewer                                                                          
executive powers than the Governor of Alaska did. The                                                                           
president did not have line item veto although Congress had                                                                     
attempted to give that authority.  The US Supreme Court                                                                         
ruled it could not be granted without a US Constitutional                                                                       
Co-Chair John Torgerson pointed out to Senator Al Adams the                                                                     
bottom of page 2, relating to how the ways and means bill                                                                       
shall be confined to changes in law determined by the                                                                           
Legislature to be necessary to implement appropriations. He                                                                     
asked if Senator Al Adams thought that would cause                                                                              
additional riders. Co-Chair John Torgerson understood that                                                                      
to be pretty restrictive.  Senator Al Adams said he would                                                                       
like to get different legal opinions from the Legal Service                                                                     
Division and the Department of Law on that point so the                                                                         
committee could fully understand. He wanted to prevent any                                                                      
abuse of that power. He didn't think all the members of the                                                                     
committee understood that portion.                                                                                              
Co-Chair John Torgerson noted the Attorney General                                                                              
testified on the bill in the Senate Judiciary Committee but                                                                     
didn't speak to this particular issue. He had comments on                                                                       
the broad title saying it could have good and bad                                                                               
implications but that the good might carry the bad.  He                                                                         
also had problems with the special sessions.                                                                                    
Senator Al Adams thought Senator Dave Donley saw the                                                                            
importance of the needed checks and balances and felt that                                                                      
the committee could work something out to solve the                                                                             
problem.  Co-Chair John Torgerson asked if it would then                                                                        
become a revision of law or a constitutional amendment.                                                                         
Senator Al Adams commented that the legalities needed to be                                                                     
looked at either way.                                                                                                           
Senator Dave Donley wanted the nine members of the                                                                              
committee to be comfortable with the bill. He asked for                                                                         
their input. There were ways to increase the checks and                                                                         
balances.  He supported the bill as is but would also                                                                           
support Senator Al Adams's suggestions. He discussed other                                                                      
He spoke of other discussions about the revisers bill. The                                                                      
reviser of statutes had the responsibility of **. He                                                                            
considered having the head of * and the head of Division of                                                                     
Legislative Finance be the head, but *.  There were ways to                                                                     
get to that concern.                                                                                                            
Senator Al Adams asked if the check and balances matter was                                                                     
discussed in the Senate Judiciary Committee. Senator Dave                                                                       
Donley said it had been. Co-Chair John Torgerson didn't                                                                         
remember the line item veto being discussed.                                                                                    
Co-Chair John Torgerson announced he would request the                                                                          
Legal Services Division to draft an amendment.  He would                                                                        
also ask the Department of Law to testify.                                                                                      
Co-Chair John Torgerson ordered the bill held in committee.                                                                     
CS FOR SENATE BILL NO. 51(L&C)                                                                                                  
"An Act relating to barbers, hairdressers,                                                                                      
manicurists, and cosmetologists; providing that the                                                                             
only qualification necessary for licensure as a                                                                                 
manicurist, other than payment of fees, is completion                                                                           
of a class that is 12 hours in duration, addresses                                                                              
relevant health, safety, and hygiene concerns, and is                                                                           
offered through a school approved by the Board of                                                                               
Barbers and Hairdressers; and providing for an                                                                                  
effective date."                                                                                                                
This was the second hearing for this bill.                                                                                      
Co-Chair John Torgerson noted material relating to the                                                                          
manicurist training was available for reference. He said                                                                        
the board member who had wished to testify at the last                                                                          
hearing had submitted written comments, which were                                                                              
distributed to the committee members.                                                                                           
Senator Randy Phillips shared that he tried to contact a                                                                        
manicurist business in his district to hear their comments                                                                      
of the bill and got no response.                                                                                                
Senator Randy Phillips offered a motion to move from                                                                            
committee CS SB 51 (L&C) from committee with the fiscal                                                                         
note adopted by the Senate Finance Committee.                                                                                   
Senator Lyda Green objected for question. She referred to                                                                       
the earlier discussion on the money involved and asked if                                                                       
the amended fiscal note reflected the change of funds to                                                                        
the Department of Environmental Conservation.  Co-Chair                                                                         
John Torgerson clarified that Department of Environmental                                                                       
Conservation changed the fiscal note so it followed the                                                                         
intent that a fee would be assessed to the licensees to                                                                         
cover the costs of Department of Environmental                                                                                  
Conservation's inspections.                                                                                                     
Senator Al Adams added that the fees would also cover                                                                           
Without objection, CS SB 51 (L&C) was reported out of                                                                           
CS FOR HOUSE JOINT RESOLUTION NO. 12(FIN)                                                                                       
Relating to federal claims against funds obtained by                                                                            
settlement of state tobacco litigation.                                                                                         
JOHN MANLEY, staff to Representative John Harris the prime                                                                      
sponsor of the bill, testified before the committee.  He                                                                        
said that HJR 12 would send a message to the President of                                                                       
the US and to Congress that the State Of Alaska brought a                                                                       
lawsuit to the tobacco companies and came to a settlement,                                                                      
which the federal government was not involved. Therefore,                                                                       
they were not entitled to a share of the money.                                                                                 
The state stood to receive about $669 million from the                                                                          
settlement over the next 25 years.  If the federal                                                                              
government had its way in exercising its prerogative under                                                                      
the proposed US Senate bill, they could take as much as                                                                         
$400 million of that amount.                                                                                                    
Therefore, the resolution asked that Congress pass a law                                                                        
directing federal agencies to not take that money.                                                                              
Co-Chair John Torgerson referred to page 2 line 16 and 17                                                                       
that basically stated that the president was to review the                                                                      
fact of the settlement and refrain from taking steps to                                                                         
recoup dollars, which the federal government was not                                                                            
entitled. He asked if the sponsor was saying that the                                                                           
federal government might be entitled to some of the                                                                             
settlement. That was his interpretation.  John Manley                                                                           
replied that intention was they would not be entitled to                                                                        
any of the settlement.  Co-Chair John Torgerson stated that                                                                     
was not what the statement said. It needed clean up.  John                                                                      
Manley suggested that portion of the language should be                                                                         
John Manley shared that the federal government felt they                                                                        
are entitled to two-thirds of the settlement under the                                                                          
Social Security Act.                                                                                                            
Co-Chair John Torgerson detailed the language discrepancy.                                                                      
Senator Sean Parnell moved to adopt Amendment #1. This                                                                          
would delete language on page 2 beginning with line 16,                                                                         
"review the facts related to the tobacco settlement with                                                                        
the State Of Alaska" and then at line 17 insert a period                                                                        
after "dollars" and delete the remainder of the line. He                                                                        
read the revised language into the record. This would                                                                           
comply with line, which stated that the State Of Alaska was                                                                     
entitled to all the funds. Without objection it was                                                                             
Senator Lyda Green suggested adding Senator Kay Bailey-                                                                         
Hutchinson to the list of recipients of the resolution. She                                                                     
was the co-sponsor of the federal legislation to claim the                                                                      
funds, SB 36 to page 2 after Senator Trent Lott. John                                                                           
Manley did not oppose this. Senator Lyda Green moved to                                                                         
adopt Amendment #2. Without objection, it was adopted.                                                                          
DOUG GARDNER, Assistant Attorney General, Oil, Gas and                                                                          
Mining Section, Civil Division, Department of Law, came to                                                                      
the table to answer any questions of the committee.                                                                             
Senator Al Adams asked if there was a fear that the federal                                                                     
government could take a portion, such as two-thirds, of the                                                                     
money that was entitled to Alaska. Doug Gardner said it was                                                                     
a real concern and that the federal legislation was                                                                             
attached to an emergency spending appropriation and had 99                                                                      
Senator Sean Parnell moved to report SCS CS HJR 12 (FIN) as                                                                     
amended out of committee.  There was no objection and it                                                                        
was so ordered.                                                                                                                 
Co-Chair John Torgerson announced committee substitutes                                                                         
were distributed for SB 33, SB 24 and SB 101. He had                                                                            
scheduled SB 101 and SB 24 for Monday morning. He told the                                                                      
committee next week's meetings would begin at 8:00 AM each                                                                      
morning to hear bills for one hour.  The meetings would                                                                         
continue at 9:00 AM with Balanced Budget Presentations.                                                                         
Senator Al Adams asked if the committee would have fiscal                                                                       
notes on SB 24 by Monday.  There was discussion between him                                                                     
and Co-Chair John Torgerson about the implications of                                                                           
Section 4 to the fiscal notes.                                                                                                  
Senator Torgerson adjourned the meeting at 10:23 AM.                                                                            
SFC-99 (7) 3/26/99                                                                                                              

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