Legislature(1999 - 2000)

04/01/1999 08:07 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
MINUTES                                                                                                                         
SENATE FINANCE COMMITTEE                                                                                                        
April 1, 1999                                                                                                                   
8:07 A.M.                                                                                                                       
                                                                                                                                
                                                                                                                                
TAPES                                                                                                                           
                                                                                                                                
SFC-99 # 78, Side A & Side B                                                                                                    
                                                                                                                                
                                                                                                                                
CALL TO ORDER                                                                                                                   
                                                                                                                                
Co-Chair John Torgerson convened the meeting at                                                                                 
approximately 8:07 A.M.                                                                                                         
                                                                                                                                
                                                                                                                                
PRESENT                                                                                                                         
                                                                                                                                
In addition to Co-Chair John Torgerson, Senator Sean                                                                            
Parnell, Senator Loren Leman, Senator Gary Wilken, Senator                                                                      
Pete Kelly and Senator Lyda Green were present when the                                                                         
meeting was convened.                                                                                                           
                                                                                                                                
Also Attending:  SENATOR ROBIN TAYLOR; DOUG WOOLIVER,                                                                           
Administrative Attorney, Alaska Court System; JUANITA                                                                           
HENSLEY; Division of Motor Vehicles, Department of                                                                              
Administration; MARK HODGINS, staff to Senator Jerry Ward.                                                                      
                                                                                                                                
Attending via Teleconference:  From Anchorage: BARBARA                                                                          
BRINK, Director, Public Defender Agency, Department of                                                                          
Administration; DIANE WENDLANT, Assistant Attorney General,                                                                     
Collections and Support, Civil Division, Department of Law.                                                                     
                                                                                                                                
                                                                                                                                
SUMMARY INFORMATION                                                                                                             
                                                                                                                                
SB 100-REIMBURSEMENT FOR PUBLIC DEFENDER                                                                                        
                                                                                                                                
The Committee heard from the Alaska Court System, the                                                                           
Department of Law and the Public Defenders Agency. An                                                                           
amendment was adopted and the bill was held.                                                                                    
                                                                                                                                
SB   6-DISPOSALS OF STATE LAND                                                                                                  
                                                                                                                                
The sponsor testified. A committee substitute was adopted                                                                       
as a Workdraft and the bill was held.                                                                                           
                                                                                                                                
SB  33-TASK FORCE ON PRIVATIZATION                                                                                              
                                                                                                                                
The Committee heard from the sponsor and the Department of                                                                      
Administration. A committee substitute was adopted and                                                                          
reported from Committee.                                                                                                        
                                                                                                                                
                                                                                                                                
CS FOR SENATE BILL NO. 100(JUD)                                                                                                 
"An Act relating to the payment by indigent persons                                                                             
for legal services and related costs."                                                                                          
                                                                                                                                
                                                                                                                                
This was the first hearing on this bill in the Senate                                                                           
Finance Committee.                                                                                                              
                                                                                                                                
DOUG WOOLIVER, Administrative Attorney, Alaska Court System                                                                     
testified that the bill was introduced at the request of                                                                        
the Alaska Court System.  He stated the bill amends the                                                                         
Public Defender reimbursement statutes by requiring those                                                                       
who receive public defender services repay the State for at                                                                     
least a portion of that representation.  He noted that                                                                          
under current law, only those convicted of a crime are                                                                          
subject to the repayment provision.  This bill would expand                                                                     
the law to require any individual receiving counsel at the                                                                      
State's expense to contribute to the cost of the                                                                                
representation whether they are convicted or not.  He                                                                           
pointed out this provision is similar to the situation of                                                                       
an individual obtaining private counsel who is also                                                                             
required to pay the cost of the defense regardless of the                                                                       
outcome.                                                                                                                        
                                                                                                                                
Senator Sean Parnell interrupted posing a scenario of being                                                                     
sued as a private party in a civil matter where the                                                                             
plaintiff lost the case. He asked if, under this bill, he                                                                       
could then seek to recover from the plaintiff.                                                                                  
                                                                                                                                
Mr. Wooliver responded that public defenders are not                                                                            
appointed in such civil cases. He clarified that the cases                                                                      
addressed in this legislation are criminal and delinquency                                                                      
cases.                                                                                                                          
                                                                                                                                
Senator Sean Parnell wanted to know if the State brought a                                                                      
"bad case" against an individual, that individual would                                                                         
then be required to reimburse the Public Defenders' Agency                                                                      
(PDA) for their defense under the proposed statute, rather                                                                      
than having the opportunity to recover the defense costs                                                                        
from the state.                                                                                                                 
                                                                                                                                
Mr. Wooliver answered the current system is the same, if                                                                        
someone is charged with a crime, has enough money to hire                                                                       
their own defense counsel and is found innocent that                                                                            
individual is not reimbursed by the State for the cost of                                                                       
their defense.                                                                                                                  
                                                                                                                                
Mr. Wooliver reiterated that this bill provides that when                                                                       
an individual receives benefits from a publicly funded                                                                          
defense counsel, that individual will repay the defense                                                                         
counsel, whether they plead guilty, are convicted or the                                                                        
State defers prosecution.                                                                                                       
                                                                                                                                
Mr. Wooliver continued qualifying that many individuals who                                                                     
receive public defender services do not have the funds to                                                                       
pay for private attorneys.  However, he stated that most                                                                        
individuals have the ability to pay for a portion of their                                                                      
defense or will have that ability over time.                                                                                    
                                                                                                                                
This was not the first time this bill has been before the                                                                       
Legislature, Mr. Wooliver told the Committee.  The Alaska                                                                       
Court System requested this change in 1993 along with some                                                                      
other changes, he noted. However, he pointed out, the                                                                           
portion of the resulting bill addressing repayment of                                                                           
public defender costs was eliminated before the legislation                                                                     
was adopted. Mr. Wooliver testified that the Division of                                                                        
Legislative Budget and Audit, during a subsequent audit of                                                                      
the PDA made the same request.  He quoted the audit report                                                                      
recommending that, "the State statute and court rules be                                                                        
amended to assess judgement against public council                                                                              
defendants not on the basis of if convicted, but rather on                                                                      
the mere fact that services were provided." He noted that                                                                       
the Alaska Court System had done its part in making the                                                                         
necessary court rule changes, but stressed that the                                                                             
legislature needs to make statutory changes before the                                                                          
repayment requirements can be implemented.                                                                                      
                                                                                                                                
Mr. Wooliver asserted that although this type of repayment                                                                      
program makes both indigent and non-indigent individuals                                                                        
liable for defense costs, there are significant                                                                                 
differences.                                                                                                                    
                                                                                                                                
[TAPE MALFUNCTION]                                                                                                              
                                                                                                                                
Mr. Wooliver continued detailing the repayment requirements                                                                     
for indigent defendants. One difference, he explained, is                                                                       
that indigent defendants would only have to repay a portion                                                                     
of the costs of their defense subject to schedules found in                                                                     
Criminal Rule 39 and Appellate Rule 209.  Furthermore, he                                                                       
pointed out, if repayment would create a financial                                                                              
hardship, the Court can reduce, remit or defer payment or                                                                       
establish a payment plan.  He assured the Committee that                                                                        
the cost of the Criminal Rule 39-repayment provision would                                                                      
not be ruined by the practice of alternate payment plans.                                                                       
He noted that the repayment system becomes a civil                                                                              
judgement and therefore protected by the Alaska Exemptions                                                                      
Act. Because of these protections, he avowed SB 100 would                                                                       
not drive poorer individuals further into poverty, but                                                                          
rather it would allow the State to recover a portion of                                                                         
defense costs from those who have an ability to pay.                                                                            
                                                                                                                                
Mr. Wooliver noted that the Senate Judiciary Committee had                                                                      
made several amendments to SB 100; including adding Section                                                                     
1 to the bill, which restricts the right of an indigent                                                                         
person to be represented by appointed counsel to the level                                                                      
and extent required by the US and state constitutions.                                                                          
Additionally, he stated the Senate Judiciary Committee                                                                          
"made mandatory entry of a judgement for repayment." He                                                                         
explained that under current statutes, the Court has the                                                                        
discretion whether or not to enter a judgement.                                                                                 
                                                                                                                                
The Senate Judiciary Committee also deleted the provision                                                                       
in the bill that allows for a stay of the judgement pending                                                                     
an appeal. Mr. Wooliver pointed out that the deleted                                                                            
language is no longer necessary since the legislation                                                                           
requires repayment regardless of a guilty or not guilty                                                                         
verdict.                                                                                                                        
                                                                                                                                
Mr. Wooliver stated that the Senate Judiciary version of                                                                        
the bill clarifies the language relating to the court's                                                                         
discretion on repayment, by stating "only the unpaid                                                                            
portion of a judgement can be reduced, remitted or                                                                              
deferred." A section of the bill was also deleted in the                                                                        
committee substitute, according to Mr. Wooliver, that had                                                                       
allowed the court to remit or reduce the balance owed on a                                                                      
judgement or change the method of payment that would impose                                                                     
a manifest hardship. However, he noted the provision                                                                            
remains that allows an individual to petition the court in                                                                      
times of hardship for a reduction of payment.                                                                                   
                                                                                                                                
Amendment #1: This amendment adds a new section to AS                                                                           
18.85.120 to read:                                                                                                              
                                                                                                                                
(e) Judgements entered under (c) of this section shall                                                                          
be imposed pursuant to trial and appellate court                                                                                
schedules adopted by the supreme court in consultation                                                                          
with the Public Defender Agency and the Office of                                                                               
Public Advocacy. The schedules shall be reviewed at                                                                             
least biannually and, when appropriate, adjusted to                                                                             
reflect changes in the cost of representation. The                                                                              
trial court schedule shall include provisions to                                                                                
impose additional costs in cases where paid expert                                                                              
witnesses are called on behalf of the defendant.                                                                                
                                                                                                                                
Senator Dave Donley moved for adoption. Co-Chair John                                                                           
Torgerson objected for purpose of discussion.                                                                                   
                                                                                                                                
Co-Chair John Torgerson referred to a letter dated March                                                                        
16, 1999 addressed to Senator Robin Taylor from Mr.                                                                             
Wooliver (copy on file) that answered some questions raised                                                                     
by the Senate Judiciary Committee. The first question                                                                           
reads, "Are the Criminal Rule 39 fees for the repayment of                                                                      
public defender representation in addition to other costs                                                                       
such as travel?" The letter replies, "No. If a court enters                                                                     
a civil judgement against a person to pay for defense                                                                           
costs, that judgement is the full extent of his or her                                                                          
liability for that representation. No additional fees are                                                                       
added for travel or other expenses." The second question                                                                        
answered in the letter asks, "When were the Criminal Rule                                                                       
39 fees last amended?" The response is, "The fees were                                                                          
adopted in 1992 and have not been amended."                                                                                     
                                                                                                                                
Co-Chair John Torgerson pointed out that this amendment                                                                         
directs the courts to review the fee schedules and                                                                              
biannually adjust the rates for charge-backs based on                                                                           
consultation with the PDA and the Office of Public Advocacy                                                                     
(OPA). Co-Chair John Torgerson noted that the current rates                                                                     
are seven years old and he felt the rates should remain                                                                         
current with the amount budgeted to provide the services.                                                                       
He added that the amendment also directs the courts to                                                                          
include the costs paid for expert witnesses in the balance                                                                      
due. Currently, he stated, the state covers the entire cost                                                                     
of expert witnesses for the defense.                                                                                            
                                                                                                                                
Co-Chair John Torgerson did not include the matter of                                                                           
travel cost reimbursement in the amendment. He said this is                                                                     
because he was advised that if reimbursement were required                                                                      
for travel costs, there could be a conflict with the equal                                                                      
protection rights of those who had to travel farther                                                                            
distances.                                                                                                                      
                                                                                                                                
Mr. Wooliver concurred with the comments on Amendment #1                                                                        
given by Co-Chair John Torgerson.  He restated the                                                                              
provision requiring the court to biannually review the fee                                                                      
schedule and to make necessary revisions to reflect the                                                                         
actual costs incurred by the PDA and the OPA.                                                                                   
                                                                                                                                
Mr. Wooliver explained when the cost repayment rules were                                                                       
initially adopted the fee schedule was based on the                                                                             
projected cost rather than the actual costs. The original                                                                       
rules also took into account that most of the repayment                                                                         
funds came from the Permanent Fund dividend, according to                                                                       
Mr. Wooliver. The revised statute will require the court to                                                                     
take into account extra-ordinary costs for expert                                                                               
witnesses.                                                                                                                      
                                                                                                                                
Co-Chair John Torgerson commented that the bill drafter had                                                                     
some concerns relating to the wording of the amendment. Co-                                                                     
Chair John Torgerson explained that the state statutes have                                                                     
a different interpretation of the court's fee schedules and                                                                     
therefore, if the amendment is adopted, the drafter should                                                                      
be given latitude to clean up language while staying within                                                                     
the intent.                                                                                                                     
                                                                                                                                
Senator Dave Donley moved to conceptually amend the motion                                                                      
to allow the bill drafter to conform the language of the                                                                        
amendment to existing statute and the court schedules.                                                                          
                                                                                                                                
Without objection Amendment #1 as conceptually AMENDED was                                                                      
ADOPTED.                                                                                                                        
                                                                                                                                
Senator Sean Parnell asked how the repayment requirements                                                                       
affect court-ordered restitution.  He wanted to know what                                                                       
priority is given to the judgement for attorney fees and if                                                                     
restitution is given a lower priority. He referred to the                                                                       
garnishment of Permanent Fund dividends.                                                                                        
                                                                                                                                
Mr. Wooliver replied that public defender costs is sixth on                                                                     
the debt repayment priority list using the Permanent Fund                                                                       
dividend.  He explained that the public defender costs are                                                                      
considered a debt owed to the State Of Alaska. Child                                                                            
Support, restitution, college loans and court fines are                                                                         
some of the debts that have a higher priority, according to                                                                     
Mr. Wooliver.                                                                                                                   
                                                                                                                                
BARBARA BRINK, Director, Public Defender Agency, Department                                                                     
of Administration testified via teleconference from                                                                             
Anchorage.  Her comments focused on page 1 lines 12 and 13                                                                      
of the committee substitute, that changes the level of                                                                          
representation required by the PDA. She stated that                                                                             
existing statute requires public defenders to perform their                                                                     
duties at the level and to the extent as an individual                                                                          
could expect who retains private council. The language                                                                          
adopted in the Senate Judiciary committee substitute states                                                                     
that representation by a public defender must be provided,                                                                      
".at the level and to the extent required under the United                                                                      
States Constitution and the Constitution of the State Of                                                                        
Alaska." She wanted to make sure there was no misperception                                                                     
of this change.  She did not want this Committee or any                                                                         
other legislature to think this language change will reduce                                                                     
the level of service the PDA is required to give and that                                                                       
consequent budget needs will decrease.  She stressed that                                                                       
the PDA duties are constitutionally defined and she                                                                             
emphasized that the state definition of the effective                                                                           
assistance of council is no different than the federal                                                                          
definition. In her opinion, the main point of the                                                                               
constitutional right to council is so that as a nation, and                                                                     
Alaska as a state, does not create a two-tiered system of                                                                       
justice - one justice system for the rich and one system                                                                        
for the poor. She asserted, "The duties and obligations of                                                                      
a lawyer to ethically, zealously and effectively represent                                                                      
their client don't depend on whether they are retained or                                                                       
appointed." She referred to a letter she sent on March 19,                                                                      
1999 (copy not on file) and said she would not repeat the                                                                       
comments she made in that letter.                                                                                               
                                                                                                                                
DIANE WENDLANT, Assistant Attorney General, Collections and                                                                     
Support, Civil Division, Department of Law testified via                                                                        
teleconference from Anchorage that her section of the                                                                           
department is responsible for collecting the repayment                                                                          
fees.                                                                                                                           
                                                                                                                                
Co-Chair John Torgerson noted that with the adoption of                                                                         
Amendment #1, changes will need to be made to the                                                                               
Department of Law fiscal note. He anticipated that the                                                                          
biannual revision of the fee schedule and the reimbursement                                                                     
for expert witnesses would increase the revenue generated.                                                                      
Ms. Wendlant agreed there would be an increase but she                                                                          
could not speculate on the exact amount.                                                                                        
                                                                                                                                
Senator Dave Donley asked Ms. Wendlant to provide him with                                                                      
suggestions on how to increase collections, whether through                                                                     
statutory changes, or other changes to make the collection                                                                      
process easier for the department.                                                                                              
                                                                                                                                
Senator Sean Parnell was troubled by the underlying policy                                                                      
allowing a party to bring action against another party and                                                                      
even if the first party fails to win, the second party must                                                                     
bear the cost of defense. He noted that in civil                                                                                
proceedings, a prevailing defendant is allowed to recover a                                                                     
portion of the attorney fees. He understood that the                                                                            
criminal system is different but he wanted to know why the                                                                      
state is allowed to bring a criminal action against someone                                                                     
and that citizen must bear the costs if he or she acquitted                                                                     
or the charges are dropped.                                                                                                     
                                                                                                                                
Mr. Wooliver responded that the costs the defendants are                                                                        
bearing are the cost of the services provided by the State.                                                                     
He noted that defendants who hire an attorney have to pay                                                                       
for the services provided by the private council as well.                                                                       
                                                                                                                                
Senator Sean Parnell pointed out that in the case of public                                                                     
defenders, the state brought the charges and the state is                                                                       
charging for defense against those charges. He qualified                                                                        
that in America, citizens pay for services, but argued that                                                                     
citizens are also allowed to recover a portion of attorney                                                                      
fees in civil cases when there is a failure to convict. He                                                                      
wanted to know why this wasn't practiced in criminal cases                                                                      
as well as civil cases.                                                                                                         
                                                                                                                                
Mr. Wooliver replied that the legislature could make a                                                                          
policy decision to not charge those defendants who are not                                                                      
convicted.  He pointed out that the majority of the cases                                                                       
affected by this legislation are not ones where the                                                                             
defendant is brought to trial and found not guilty. Most of                                                                     
these cases, he said, involve deferred prosecutions,                                                                            
failure to meet the 120-day Rule or the State drops the                                                                         
charges for a variety of reasons. However, he emphasized,                                                                       
if the legislature wanted, and if the state could afford                                                                        
it, it could establish a system of charge-backs, where the                                                                      
State would refund attorney fees to defendants not                                                                              
convicted. He noted that the charge-backs would apply to                                                                        
private attorney fees as well as absorbing the costs of                                                                         
public defenders.  However, he stressed that the Court                                                                          
feels that all criminal defendants should pay their                                                                             
attorney fees.                                                                                                                  
                                                                                                                                
Senator Dave Donley reinforced Mr. Wooliver's argument                                                                          
saying there should be no discrimination between rich or                                                                        
poor.  He believed all defendants should pay for the                                                                            
service according to their ability. He also noted there are                                                                     
many reasons why a guilty person is not convicted, citing                                                                       
the 120-day rule, technical reasons, lack of resources to                                                                       
prosecute, inadmissibility of evidence or admissions, etc.                                                                      
It particularly troubled him that judges may appoint                                                                            
counsel regardless of the monetary status of the                                                                                
individual.  Regarding the differences between civil and                                                                        
criminal actions, he pointed out that there are different                                                                       
standards and that the state has a higher burden of proof.                                                                      
He told the Committee that there is a safeguard against                                                                         
wrongful prosecution in existing law so if the State was                                                                        
out of line and did not have grounds to prosecute the                                                                           
defendant could initiate a civil action and recoup defense                                                                      
costs.                                                                                                                          
                                                                                                                                
Senator Dave Donley offered a motion to report from                                                                             
Committee, CSSB 100(FIN). Without objection it was reported                                                                     
out with individual recommendations and accompanying fiscal                                                                     
notes from the Department of Law, $68.9 and the Alaska                                                                          
Court System, zero.                                                                                                             
                                                                                                                                
                                                                                                                                
SENATE BILL NO. 6                                                                                                               
"An Act relating to the disposal of state land."                                                                                
                                                                                                                                
                                                                                                                                
This was the third hearing for this bill in the Senate                                                                          
Finance Committee. A motion to adopt and a motion to amend                                                                      
Amendment #2 were pending from the previous hearing.                                                                            
                                                                                                                                
Co-Chair John Torgerson directed the Committee's attention                                                                      
to a proposed committee substitute, 1-LS0071/H, 3/26/99,                                                                        
the sponsor wanted adopted.                                                                                                     
                                                                                                                                
Senator ROBIN TAYLOR, the sponsor of the bill, joined the                                                                       
Committee and explained that the proposed committee                                                                             
substitute shifts the obligation for both identifying and                                                                       
selling State land from the commissioner of the Department                                                                      
of Natural Resources to a State Land Commission that would                                                                      
be formed under this legislation. He noted that while the                                                                       
governor would appoint the members of the land commission,                                                                      
the commission would report to the legislature and the                                                                          
process would be subjected to a five-year review period and                                                                     
a ten-year sunset. This, he stressed, would give the                                                                            
legislature an opportunity to review and revise the process                                                                     
as necessary. He described the membership of the                                                                                
commission, saying it would consist of five members: a real                                                                     
estate appraiser, a real estate broker, a land surveyor                                                                         
plus two members of the public appointed at-large. He added                                                                     
that no more than three members could belong to the same                                                                        
political party.                                                                                                                
                                                                                                                                
Senator Robin Taylor then noted that the committee                                                                              
substitute also calls for the creation of land disposal                                                                         
advisory boards in every municipality and borough. Those                                                                        
areas of the state not included in a borough would also be                                                                      
represented by advisory boards, he stated, following the                                                                        
Model Borough Boundary Act to establish the geographic                                                                          
regions. He stressed that the purpose of the advisory                                                                           
boards would be to provide local input to the State Land                                                                        
Commission recommending lands to be offered for sale.                                                                           
                                                                                                                                
Senator Robin Taylor stated that the intent of this                                                                             
legislation is to create a land disposal bank that would                                                                        
have a minimum of 250,000 acres available each year for                                                                         
disposal by the state.                                                                                                          
                                                                                                                                
Senator Robin Taylor pointed out that this legislation                                                                          
places some limitations on the size of land disposals. The                                                                      
legislation reads as follows:                                                                                                   
                                                                                                                                
".parcels identified as appropriate for sale must                                                                               
consist of 160 acres or more, except that parcels                                                                               
identified by an advisory board as suitable for                                                                                 
recreation and homesites must consist of 40 acres or                                                                            
more, individual parcels in subdivisions intended for                                                                           
private residential or recreational use may not exceed                                                                          
five acres."                                                                                                                    
                                                                                                                                
He also noted that lands must be provided for a variety of                                                                      
uses such as agricultural, timber and recreational. In                                                                          
other words, he explained all the lands available for                                                                           
disposal would not be located in one area or have only one                                                                      
feasible use.                                                                                                                   
                                                                                                                                
Senator Robin Taylor stated the committee substitute                                                                            
provides that lands would be sold at auction and a                                                                              
provision requires that bidders meet the same Alaskan                                                                           
residency criteria as dictated in the Permanent Fund                                                                            
dividend program. He noted that the bidding procedures                                                                          
would not change from the current practices and that land                                                                       
not sold through the auction process would then become                                                                          
available to nonresidents for purchase.                                                                                         
                                                                                                                                
Senator Robin Taylor pointed out that the committee                                                                             
substitute replaces the word "Commissioner" with                                                                                
"Commission" in several places in the bill to reflect the                                                                       
change of authority over the land disposals.                                                                                    
                                                                                                                                
Senator Robin Taylor explained that the committee                                                                               
substitute establishes that the legislature annually                                                                            
reviews the lands selected and decides which lands are                                                                          
offered for disposal.                                                                                                           
                                                                                                                                
Senator Robin Taylor summarized by saying that other                                                                            
language in the committee substitute is basically                                                                               
housekeeping items to state the terms of the commission                                                                         
members.  However, he noted the absence of earlier clean-up                                                                     
language that was added to an earlier committee substitute                                                                      
regarding the appraisal system. He did not know why the                                                                         
language was omitted and felt it should be included.                                                                            
                                                                                                                                
Co-Chair John Torgerson guessed the language was omitted                                                                        
due to changes made to the provisions governing auctions.                                                                       
                                                                                                                                
Senator Pete Kelly asked if the committee substitute                                                                            
contained a mechanism for land that is put up for auction                                                                       
but not sold. Senator Robin Taylor replied that the land                                                                        
would accrue in a "land bank", which is the current                                                                             
practice.  He thought that the land bank currently contains                                                                     
45 to 50 thousand acres that are surveyed and placed up for                                                                     
public sale.  He noted that most of that land is property                                                                       
earlier sold but returned to the State for various reasons                                                                      
such as default on payment.                                                                                                     
                                                                                                                                
Senator Robin Taylor added that this bill began as an                                                                           
effort to force the Department of Natural Resources to sell                                                                     
land held in the land bank.                                                                                                     
                                                                                                                                
Co-Chair John Torgerson referred to the provision on page                                                                       
3, beginning at line 26 of the committee substitute                                                                             
directing the Department of Natural Resources to dispose of                                                                     
land held in the land bank. He asked if there should be a                                                                       
cap on the amount of land held in the land bank. He had                                                                         
concerns with the wording, "disposed of". He suggested                                                                          
using, "offered" instead so that the department is not                                                                          
forced to simply give the land away. Senator Robin Taylor                                                                       
felt that a cap should be placed.  Co-Chair John Torgerson                                                                      
qualified that he had not had much time to study the bill                                                                       
and that this hearing was intended as an overview.                                                                              
                                                                                                                                
Senator Loren Leman shared Co-Chair John Torgerson's                                                                            
concern about the implication of the phrase "shall be                                                                           
disposed of". He also had concerns about the minimum and                                                                        
maximum parcel size stipulations. He thought the witness'                                                                       
testimony did not accurately reflect the language of the                                                                        
committee substitute. Senator Robin Taylor clarified his                                                                        
earlier statement.                                                                                                              
                                                                                                                                
Senator Loren Leman wanted to know the reason for the                                                                           
minimum size restrictions for recreation use lands and                                                                          
homesites. He suggested there could be some areas smaller                                                                       
than forty acres that would be suitable for these uses such                                                                     
as around Lake Clark.  Senator Robin Taylor replied that he                                                                     
has been working with the department to draft the bill's                                                                        
provisions.  He learned that the cost of disposal of small                                                                      
parcels becomes unfeasible for the State. He qualified that                                                                     
he did not believe there should be any of the size                                                                              
limitations. For example, he wanted the land managers to                                                                        
dispose of the state's bug infested timberlands in any way                                                                      
possible for the purpose of cleaning up the land and                                                                            
reforestation. He stated, "trying to legislate common sense                                                                     
is very difficult." His intent with this legislation is to                                                                      
give the department perimeters and he was willing to amend                                                                      
the bill in any way to effectively achieve this.                                                                                
                                                                                                                                
Senator Loren Leman suggested a fallback position                                                                               
stipulating that the size provisions will be standard                                                                           
except when a finding is made showing that another method                                                                       
is more appropriate. He stressed that he did not want the                                                                       
department to use the size provisions as an excuse to not                                                                       
dispose of certain lands.                                                                                                       
                                                                                                                                
Co-Chair John Torgerson noted his efforts along with the                                                                        
sponsor's to establish a land disposal commission. He felt                                                                      
that more needed to be done on this legislation before it                                                                       
could be reported from Committee. He wanted the committee                                                                       
substitute distributed to the department for                                                                                    
recommendations on how to further refine the bill.                                                                              
                                                                                                                                
Senator Lyda Green moved for adoption of CS SB 6, 1-                                                                            
LS007/H, 3/26/99 as a Workdraft. It was ADOPTED without                                                                         
objection.                                                                                                                      
                                                                                                                                
Senator Dave Donley was concerned that the title is so                                                                          
specific that he was unsure if the other body would support                                                                     
the legislation. He wanted to know if the stipulation that                                                                      
250,000 acres must be distributed annually could be deleted                                                                     
from the title.  Senator Robin Taylor responded that he was                                                                     
not bound by any number and that he only used 250,000 as a                                                                      
starting point. He stressed that he was open to                                                                                 
suggestions. Senator Dave Donley stated that he thought a                                                                       
generic figure would be more appropriate. Co-Chair John                                                                         
Torgerson agreed and felt 250,000 acres is aggressive                                                                           
especially if it is to be an annually reoccurring disposal.                                                                     
                                                                                                                                
Senator Loren Leman moved to amend the committee substitute                                                                     
to delete "250,000 acres of" from page 1 line 2, the title.                                                                     
Co-Chair John Torgerson said the motion could be made but                                                                       
the Committee would then need to come back with a new                                                                           
committee substitute.  He preferred to incorporate this                                                                         
change along with other suggestions into one committee                                                                          
substitute rather than make a few small changes here and                                                                        
there.  Senator Loren Leman withdrew his motion.                                                                                
                                                                                                                                
Co-Chair John Torgerson ordered SB 6 held in Committee.                                                                         
                                                                                                                                
Co-Chair John Torgerson explained that the meeting will                                                                         
recess until 9:00 AM when the teleconference is connected                                                                       
to allow public testimony on the State's budget.                                                                                
                                                                                                                                
Senator Gary Wilken asked if the Senate Resolution                                                                              
regarding crowning the Women of Senate Finance as Alaskan                                                                       
royalty would be heard today.  Co-Chair John Torgerson said                                                                     
the resolution would be taken under advisement. He noted                                                                        
that the Senate Finance Secretary's office did not file the                                                                     
resolution in a timely manner. Senator Gary Wilken                                                                              
suggested the resolution be referred to a number of                                                                             
subcommittees for consideration. Co-Chair John Torgerson                                                                        
agreed and appointed Senator Gary Wilken as chair of the                                                                        
first subcommittee; Senator Loren Leman as chair of the                                                                         
second; Senator Dave Donley as chair of the third; Senator                                                                      
Lyda Green as chair of the forth and Senator Pete Kelly as                                                                      
chair of the fifth subcommittee. Senator Lyda Green                                                                             
protested that the Committee was not advancing the                                                                              
legislation in support of the Women of Senate Finance.                                                                          
[APRIL FOOLS!!]                                                                                                                 
                                                                                                                                
AT EASE until 9:05AM/9:06AM                                                                                                     
                                                                                                                                
Co-Chair Sean Parnell noted this portion of the meeting was                                                                     
set aside for public testimony on long range solutions for                                                                      
the state's fiscal situation. There was no one present to                                                                       
testify so the Committee addressed the next bill on the                                                                         
agenda with the understanding that it would be set aside if                                                                     
anyone arrived wishing to testify on the budget.                                                                                
                                                                                                                                
AT EASE 9:07AM/9:09AM                                                                                                           
                                                                                                                                
                                                                                                                                
SENATE BILL NO. 33                                                                                                              
"An Act relating to the Task Force on Privatization;                                                                            
and providing for an effective date."                                                                                           
                                                                                                                                
                                                                                                                                
This was the fifth hearing for this bill in the Senate                                                                          
Finance Committee. Co-Chair John Torgerson noted that the                                                                       
Committee had adopted a committee substitute, Version "N"                                                                       
as a Workdraft in an earlier hearing but there was a new                                                                        
proposed committee substitute before members for                                                                                
consideration.                                                                                                                  
                                                                                                                                
Co-Chair John Torgerson reminded the Committee that the                                                                         
first committee substitute amended the language relating to                                                                     
items not subject to bargaining and the unrestricted                                                                            
authority of the employer to enter into contracts with the                                                                      
private sector to perform certain public functions. He also                                                                     
noted that two amendments proposed by Senator Loren Leman                                                                       
were adopted. Senator Loren Leman detailed the changes made                                                                     
by the amendments, saying one amendment inserted "or to                                                                         
perform more efficiently" after each provision relating to                                                                      
debt consolidation. The other amendment, he noted, allows                                                                       
the commissioner to appoint an unpaid advisory council.                                                                         
                                                                                                                                
Co-Chair John Torgerson pointed out that the proposed                                                                           
committee substitute incorporates those amendments.                                                                             
                                                                                                                                
Senator Sean Parnell moved for adoption as a Workdraft, CS                                                                      
SB 33, 1-LS0317/S, 3/25/99. The committee substitute was                                                                        
adopted without objection.                                                                                                      
                                                                                                                                
MARK HODGINS, staff to the bill sponsor, Senator Jerry Ward                                                                     
testified. He noted that the legislation had evolved from                                                                       
establishing a task force to a commission, but reassured                                                                        
the Committee that the committee substitute is compatible                                                                       
with the sponsor's intent for privatization of services and                                                                     
savings for the State.  He stated that several individuals                                                                      
wished to testify on this legislation but have been unable                                                                      
due to the rescheduling of hearings. Therefore, he                                                                              
presented written testimony from some of those people. He                                                                       
referred to a letter supporting the bill from The Alliance                                                                      
dated March 18, 1999 and a resolution in support of the                                                                         
bill from the Alaska State Chamber of Commerce adopted                                                                          
December 4, 1998. (Copies on file)                                                                                              
                                                                                                                                
                                                                                                                                
Tape: SFC - 99 #78, Side B                                                                                                      
                                                                                                                                
                                                                                                                                
JUANITA HENSLEY, Department of Administration, testified to                                                                     
the section of the committee substitute that amends the                                                                         
Public Employee Relations Act (PERA).  She stated that the                                                                      
Administration has concerns with the PERA changes and                                                                           
believed that at this time, making changes of this                                                                              
magnitude affects the ability to enter into negotiations in                                                                     
the remaining term contract.                                                                                                    
                                                                                                                                
She stressed the Administration's first priority in                                                                             
negotiation of contracts is cost containment and attempting                                                                     
to reach a zero cost contract. Changing PERA in the middle                                                                      
of the contract negotiations, she warned, could jeopardize                                                                      
the cost objectives.                                                                                                            
                                                                                                                                
She added that the current contract with the state                                                                              
employees does not prohibit the State from outsourcing                                                                          
services if cost effectiveness for the State can be shown.                                                                      
She used the Division of Motor Vehicles as an example of                                                                        
the State entering a partnership with the private sector to                                                                     
enhance services to the public.                                                                                                 
                                                                                                                                
Senator Lyda Green referred to the practice of outsourcing                                                                      
Division of Motor Vehicle services saying that the division                                                                     
could not expand privately administered services into the                                                                       
Mat-Su area was because of an inadequate cost savings as                                                                        
required under current statute.                                                                                                 
                                                                                                                                
Juanita Hensley responded that the division outsources                                                                          
services when it can be shown to be cost effective. She                                                                         
listed Tok, Talkeetna and Glennallen as communities where                                                                       
the private sector is providing the services and the                                                                            
division has been able to eliminate the government                                                                              
positions.                                                                                                                      
                                                                                                                                
Senator Gary Wilken supported the legislation but was                                                                           
concerned that it contains an item that caused a similar                                                                        
bill to be vetoed the previous year. Co-Chair John                                                                              
Torgerson explained that the item in question is a                                                                              
provision allowing the governor to appoint a member to the                                                                      
commission. Senator Gary Wilken referred to the governor's                                                                      
veto message raising concerns about the separation of                                                                           
powers. Senator Gary Wilken hoped this bill would not be                                                                        
vetoed for the same reason and stressed that the Committee                                                                      
needs to recognize that possibility and perhaps address the                                                                     
issue.                                                                                                                          
                                                                                                                                
Co-Chair John Torgerson commented that the previous                                                                             
legislation gave subpoena power to the commission, which                                                                        
caused concern for the governor. He assured that provision                                                                      
is not in the current bill. He added that if the governor                                                                       
chooses to not participate in the process by vetoing this                                                                       
bill, it sends a strong message that the governor is not                                                                        
interested in working toward consolidation or                                                                                   
privatization.                                                                                                                  
                                                                                                                                
Senator Loren Leman offered a motion to report from                                                                             
Committee, CSSB 33 (FIN) and without objection it was                                                                           
reported out with an indeterminate fiscal note from the                                                                         
Office of the Governor.                                                                                                         
                                                                                                                                
                                                                                                                                
Co-Chair John Torgerson noted the Committee would stand in                                                                      
recess and come back to order if someone arrived wishing to                                                                     
testify on the long-range budget situation.                                                                                     
                                                                                                                                
AT EASE 9:20AM/10:22AM                                                                                                          
                                                                                                                                
Co-Chair Sean Parnell noted there was no one present to                                                                         
testify.                                                                                                                        
                                                                                                                                
ADJOURNED                                                                                                                       
                                                                                                                                
Co-Chair Sean Parnell adjourned the meeting at 10:22 AM.                                                                        
SFC-99 (16) 4/1/99                                                                                                              

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