Legislature(1999 - 2000)
03/15/1999 09:09 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
March 15, 1999
9:09 AM
TAPES
SFC-99 # 55, Side A & Side B
CALL TO ORDER
Co-Chair John Torgerson convened the meeting at
approximately 9:09 AM.
PRESENT
Senator John Torgerson, Senator Sean Parnell, Senator Randy
Phillips, Senator Dave Donley, Senator Loren Leman, Senator
Gary Wilken, Senator Al Adams, Senator Pete Kelly and
Senator Lyda Green.
Also Attending: CAROL CARROLL, Director, Division of
Administrative Services, Department of Military and
Veterans Affairs; JACK FARGNOLI, Coordinator, Y2K Project
Office.
Attending via Teleconference: From Anchorage: DAVID
LIEBERSBACH, Director, Division of Emergency Services,
Department of Military and Veterans Affairs; MARY GILSON,
Assistant Attorney General, Governmental Affairs Section,
Civil Division, Department of Law.
SUMMARY INFORMATION
SB 101-DEFINITION OF DISASTER
The committee heard testimony from the Division of
Emergency Services and the Department of Law. The bill was
held in committee.
SB 33-TASK FORCE ON PRIVATIZATION
Co-Chair John Torgerson handed out a draft committee
substitute for member's review. The bill was held in
committee.
SENATE BILL NO. 101
"An Act amending the definition of 'disaster.'"
This was the first hearing for this bill.
Senator Randy Phillips explained that his office went
through the statutes dealing with disasters and came up
with a proposed amendment to include economic disasters.
He said he questioned what constituted a disaster and noted
the inclusion of typhoons, tornadoes and hurricanes and
wondered why they were listed in the bill. He suggested
deletion of those terms and inserting "severe storm".
Co-Chair John Torgerson pointed out that Alaska has had
typhoons. One of which caused the last SouthCentral
floods. He knew that the Aleutian Islands received a great
deal of wind but didn't know if that qualified as
hurricanes.
BRUCE CAMPBELL, staff to Senator Randy Phillips explained
the bill to the committee. SB 101 contained a couple
adjustments in the definition of disaster. First was on
line 5: shortage of food, water, fuel and clothing was
added so that instead of being types of disaster as earlier
listed on line 11, they could become caused by disasters.
The second change involved the disasters as listed on line
6 in addition to a natural or manmade caused disaster.
That seemed to be all-inclusive, but if there were any
question that something was neither manmade nor natural,
such as supernatural, the removal of the language would
include those. There was no intent to require an event to
be defined as either natural or manmade cause.
Senator Al Adams referred to lines 8-12, the list of
disasters and pointed out that some of the disasters would
never happen in Alaska such as typhoon or a hurricane, and
suggested focusing on more likely disasters like winter
storms, ice storms, blizzards and droughts. Mr. Campbell
didn't disagree.
Senator Al Adams handed out list of disasters from other
states that were qualified for receipt of federal funds and
felt that Alaska should include some of these things. He
specified some of the particular disasters noted in other
states. He asked what would happen if statutes were adopted
that were too restrictive, an event not covered on the list
occurred, and the state wished to seek FEMA relief funds.
He wanted the disaster list to allow the state to capture
the maximum amount of needed federal funds.
Senator Sean Parnell said he visited the same Internet site
where Senator Al Adams's information was obtained and found
the same information helpful. He felt that the state
statute could be structured to fit FEMA guidelines. He
thought the current statutes was not as restrictive as the
FEMA guidelines and he wished to see a more narrow focus on
the type of event allowed and also the immediacy of the
impact. He noted that current law allowed for funding of
capital projects a couple years after the event and did not
address the immediate problems incurred during the
disaster. He thought there was a difference between the
immediate disaster relief funds focused on a catastrophic
event with and immediate impact on the citizens and the
funds for long term economic impact. He felt there could
still be funding for the other projects but that they
shouldn't be included in the provisions for emergencies.
Senator Gary Wilken asked what were the seven allowable
disasters. Senator Sean Parnell answered, earthquakes
tsmaumis, landslides, winter storms, floods, severe storms
and fires were included in a FEMA listing as disasters that
occur in Alaska. Senator Dave Donley thought the language
should be "severe winter storms."
Co-Chair John Torgerson said many other states had adopted
language similar to FEMA. He read some information from
the Stanford Act into the record, "In the determination of
the President, causes damage of the magnitude to warrant
major disaster assistance under the Disaster Relief Act of
1974.." That language would ensure that the federal funding
could be collected. Also the determination of which event
caused the trigger of the Stanford Act was incorporated by
reference to the act. It might be broader than the seven
events listed by Senator Sean Parnell. He agreed with
Senator Al Adams that the statute shouldn't be tightened up
too much but by referencing the federal disasters law it
could prevent the omission of an event the federal
government might fund.
Senator Lyda Green commented on Senator Al Adams's point
referring to Section 3 a totally separate section on farm
disaster that the Governor could declare if a natural
disaster caused a crop failure. Co-Chair John Torgerson
spoke about a recent crop failure in the Big Delta area due
to drought.
JACK FARGNOLI, Y2K Coordinator for the State Of Alaska,
spoke of concerns of his office about the uncertainty any
enumeration scheme would put into place in general about
disasters and in particularly with Y2K failures. He said
that not to oppose the logic or wisdom of speaking to an
enumeration scheme or any attempt to clarify what the state
wished to do regarding disasters. Any clarity was always
laudable. In general, he felt the comments of the committee
so far reflected those of the Y2K office that other events
may need to be considered. There were certain events
unique to Alaska.
In terms of a more narrow focus with the Y2K disasters, the
department felt that Subsection C of the current bill was
not changed and probably adequate. This was because most
disasters that would emanate as a result of a Y2K event
would probably be the result of an equipment failure.
However, the language in Section C spoke to "avoidability"
due to adequate maintenance. His office had concerns about
that because that was a question at the forefront of Y2K
liability discussions. There were strong arguments on both
sides as to what was avoidable. Unfortunately, the courts
had only just begun to speak to that issue and probably not
make major determinations until after failures actually
occurred.
He summarized stressing that their biggest concern was the
immeasurable gaps that the current enumeration scheme might
leave.
Senator Lyda Green asked if the removal of the comma in
Section C caused that problem. She thought that what Jack
Fargnoli referred to already was in statute. Jack Fargnoli
said he was not asking for a change there.
Co-Chair John Torgerson commented that this testimony made
him want to tighten the language further with the threat of
Y2K disaster funding expenditures.
Senator Randy Phillips stressed that Section 2 (c) was
currently in state statute and the Y2K office should have
brought the concerns up several years ago. Jack Fargnoli
agreed that it was in the law and that his office had not
made an issue of it because Y2K had not been a legal
consideration for longer than the past year. They had non-
urgent legal concerns about the language in subsection C.
However, there was ambiguity to the issue.
Senator Randy Phillips said the reason we were here was
because of numerous audits regarding misappropriation of
dollars for disaster relief. He said the process was not
perfect but that was the reason for this bill. He
reprimanded Mr. Fargnoli and the Administration for not
offering a solution to the problems.
Jack Fargnoli repeated that he was not here to testify
against the intent of the bill, but it would cause
uncertainty in the Y2K areas and he had broader concerns
about things that might fall between the cracks. He listed
attributes he felt the bill offered.
Senator Al Adams referred to lines 6 and 7 that would
delete "a natural or manmade cause." He wanted to know
what would happen in cases such as the Miller's Reach Fire
where it was determined that the fire was caused by
firecrackers. Would there be debate about the merits of
the manmade cause of the fire while the fire was left to
burn property and houses. Or would the definition of "fire"
be sufficient? Jack Fargnoli deferred to others who were
waiting to testify.
DAVID LIEBERSBACK, Director of Emergency Services,
Department of Military and Veterans Affairs, testified via
teleconference from Anchorage. He began by stating that the
division welcomed any opportunity to discuss process under
which communities could seek help from state and federal
government in times of disasters. In accordance with AK
26.23.050, it had always been the policy of the state that
funds to meet disaster emergencies would be available. This
policy served the citizens of the state quite well,
according to David Liebersback. Under the new definition in
SB 101, which would narrow the event under which the
Governor could declare a disaster, the state would be
constrained to assist Alaskans when an unusual natural
event occurred. In addition, the division would be unable
to respond to manmade events unless they were the release
of oil or hazardous substance or an equipment failure, but
only if that failure was predictably frequent, or a
reoccurring event, or was not preventable by adequate
equipment maintenance or operation. He listed past events
from the last twenty years that would not be declarable
under the new definition, including the 1979 Mat-Su Borough
severe storm and high winds that closed roads and stranded
residents. Rescue vehicles were unable to reach those in
danger and the state declared a disaster to enable the
Department of Transportation and Public Utilities and the
National Guard to clear the road. Other events were the
1980 Anchorage windstorm that damaged over 5000 homes and
businesses. In 1983 Ketchikan, a ship mishap damaged a dock
on Gravina Island that was needed for fuel transport
between the city and the airport. The state provided
temporary alternate transportation until the dock was
repaired. In 1985 the Metlakatla severe drought reduced
water levels so the hydroelectric system could not generate
sufficient power. In 1989 statewide record-breaking cold
saw temperatures down to -85 degrees. The state and the
federal government declared a disaster in order to provide
for repairs to maintain and prevent damage to water, sewer,
electrical systems and emergency re-supply of essential
fuels and food. In 1991 severe erosion of the banks of the
Mat-Su River destroyed or threatened homes along the bank.
In 1991 the Seward sewage treatment lagoon suffered a
catastrophic failure from undetermined causes. Finally, in
1998 Western Alaska Fisheries Disaster saw record high
water temperatures in the Bering Sea and poor survival of
all salmon and changes in migratory pathways, which lead to
a collapse of the salmon run. The state requested federal
disaster aid and the federal government responded as they
did with the Texas drought crop failures due to extreme and
unusual weather patterns.
He added other events that would not be covered. Any act as
the result of terrorism, weapons of mass destruction, train
or shipwrecks caused by human error and Y2K failures would
also be disasters that the division would be unable to
respond to under the new requirements of the bill.
Department of Environmental Conservation respectfully
cautioned the committee to carefully consider this new
definition because it would be extremely difficult to
define and list each possible event that may harm the
people or property of the state. He added a recent meteor
hit in the Mat-Su Valley. Had it been larger or in a
populated area, the state would be unable to declare a
disaster under the new definition.
He summarized the list of events not allowed under the new
provisions.
Senator Lyda Green requested a written copy of the
testimony given by David Liebersback.
Co-Chair John Torgerson asked if any of the aforementioned
disasters were federally declared. David Liebersback
replied that the 1989 cold spell was federally declared. He
explained that in order to become a federal disaster, an
event first had to be declared a state disaster. Co-Chair
John Torgerson clarified that the high winds experienced in
Anchorage was not declared. David Liebersback said it was
a state declared disaster but it did receive federal Small
Business Administration assistance due to the state
declaration. The Small Business Administration was able to
declare an agency disaster, which was different than a full
presidential declared disaster.
Co-Chair John Torgerson stated his desire to tighten the
language and requested David Liebersback submit
suggestions.
Senator Loren Leman referred to the current language
relating to oil or hazardous substance as, ".if the release
required prompt action to avert environmental danger or
damage.." He wondered if that was the same definition that
was used under federal law or was it a broad definition of
Title 26. David Liebersback answered that the definition of
hazardous substance referred to AK 46.03.826, which
governed the Department of Environmental Conservation and
was a fairly broad definition.
Senator Loren Leman was trying to determine if that statute
would help the division with potential major sewer
treatment failures. He said he would research the matter.
Senator Lyda Green spoke to her concerns with the immediacy
of response. She wanted clarification of that language
stipulating the difference between an emergency and an
emergency disaster and to make it the focus. That was the
area where a tremendous amount of funds were expended.
David Liebersback responded that there were some options.
He spoke about the recovery stage after an event saying it
was a long-term process. The division relied on FEMA for
funding of recovery. FEMA was not equipped to assist in
the immediate response needed for some of the disasters in
Alaska.
Senator Lyda Green referred to language in Section 26
saying that emergency had a meaning given in US code. She
suggested the committee could research that area.
Senator Loren Leman pointed out that the definition in
Title 46 for hazardous substance was broader than he
expected and read the language into the record. "An element
or compound, which when it enters in the atmosphere or in
or upon the water or surface or subsurface land or the sea,
presents an eminent and substantial danger to public health
or welfare including but not limited to fish, animal or
vegetation or any part of the natural habitat in which they
are found." He believed that would cover the failure of a
sewage treatment plant as well as a chlorine leak or
similar event.
MARY GILSON, Assistant Attorney General, Governmental
Affairs Section, Civil Division, Department of Law
testified via teleconference from Anchorage. She gave a
historical perspective on the definition of disasters. The
current definition of disaster was modeled after the Model
State Disaster Act, written in 1972. Many states had
similar definitions. She had done research of other states
and their definitions and found none with a finite list of
disasters, and they were much broader.
Co-Chair John Torgerson countered that his research found
several states with tighter definitions. Mary Gilson
pointed out that Idaho used language, "included but not
limited to." There was further debate between Co-Chair John
Torgerson and Mary Gilson on this point.
Senator Randy Phillips had a proposed Amendment #1 that he
chose to not offer at the time.
Senator Al Adams wanted to see a list of federal programs
and funding available and what would happen if the statute
were tightened. He wanted to know what federal funding
would be lost.
Co-Chair John Torgerson said his intent was to incorporate
language that would allow for all available federal
funding.
Senator Dave Donley wanted to consider modifications to AS
26.23.025, specifically subsection C (1) where the language
discussed the requirement of a special session or
authorization of the presiding officers to spend more than
$1 million. He wanted to add a $5 million cap on that
figure. Secondly, for expenditures over $5 million, he felt
the presiding officers should poll the members of the
Legislature to obtain written approval by the majority of
the Legislature for additional expenditures. He felt the
original language was adopted before the advent of fax
machines, e-mail and cellular phones, when it was more
difficult for people to reach one another. Now technology
provided plenty of opportunity to consult the members of
the Legislature. He felt a $5 million cap was reasonable.
Co-Chair John Torgerson did not approve of the idea of
polling members of the Legislature on substantial binding
issues, suggesting this would open up another issue
involving open meeting violations and other problems.
Senator Dave Donley said he would rather there was more
than the two presiding officers involved in the expenditure
decision making. His proposal would not be in conflict of
the Open Meetings Act if the current practice of obtaining
approval from the presiding officers was not in conflict.
This method would allow a majority to make the decision to
authorize funds for disasters. Co-Chair John Torgerson
countered that he didn't believe the Speaker of the House
and the President of the Senate were currently approving
any expenditure of funds. They were just deciding whether
or not to call the Legislature into a special session. He
admitted that this decision would in fact affect whether or
not funds would be expended, but they still would not be
approved without the approval of the body of the
Legislature.
Senator Dave Donley said the poll could therefore be held
to determine whether or not there would be a special
session. Co-Chair John Torgerson conceded.
Co-Chair John Torgerson ordered the bill held in committee.
The committee took a short recess.
SENATE BILL NO. 33
"An Act relating to the Task Force on Privatization;
and providing for an effective date."
This was the third hearing for this bill.
Co-Chair John Torgerson noted the committee had just been
handed out a proposed CS Version ". He detailed the
changes. On page 2 language was inserted beginning with
line 16 after, "Items not subject to bargaining.." A new
subsection (5) was added that stated, "the unrestricted
authority of the employer to enter into contracts with an
entity of the private sector of the economy to perform a
function previously performed by state employees." He
explained that this would allow the state to privatize some
sections of government without any prohibitions from the
employee bargaining contracts. This was because, under
this provision, the Administration was prohibited from
using any privatization restrictions in the bargaining
process.
Also changed was language from Section 3, line 29, which
would now read, ".The labor or employee organization
representing those employees may prepare and submit on
behalf of the employees to demonstrate that the state will
not reduce costs by contracting the performance of that
function. A response prepared or submitted by the labor
employee union is not entitled to a preference over bids
submitted to perform the function, but the state shall
consider the response before making its decisions." This
again directed the Administration not to bargain the
privatization option away.
He asked that committee members review the Workdraft and
come back to the committee with comments and suggestions.
Senator Loren Leman asked if this version incorporated any
amendments adopted at its earlier hearing. Co-Chair John
Torgerson was unsure if any of the earlier amendments were
actually adopted.
Senator Loren Leman said he would offer other amendments at
the next meeting to address the mandate to the advisory
council.
Co-Chair John Torgerson ordered the bill held in committee.
Senator Dave Donley shared with the committee that he had
met with the Attorney General to discuss the current forms
the Legislature received regarding information on
judgements and claims. Senator Dave Donley had a handout
for the committee.
Tape: SFC - 99 #55, Side B 9:58 AM
He had proposed to the Attorney General there were some
items for which the Legislature would like additional
information and handed out to the committee a copy of the
suggested changes. The Attorney General was receptive to
the suggestions, according to Senator Dave Donley, and in
fact said he would move forward within the department to
incorporate those ideas into future forms. There were
however a couple items the Attorney General had concerns
about.
Senator Dave Donley compared the current forms to his
proposed replacements noting the information the committee
felt was missing during the appropriation hearings.
The distinction between the two versions of the Department
of Law Judgement and Claims Payment Information was the
addition of items eight and nine. They asked the questions
of what was the hourly rate charged by the attorneys
involved, and what was the amount the court approved, that
the Legislature was being asked to reimburse. He felt that
was important because there were some cases were the court
was ordering the state to pay some attorneys $275 an hour,
which was vastly beyond what would be available under Rule
82 in any other case, and also beyond the industry norm.
The second form was the Judgement Award Questionnaire. He
added several questions. First was number five, which
asked, "Who was responsible for the state incurring this
cost?" That was an effort to bring accountability to the
process and determine what individual made the decision or
committed the act that incurred the cost to the state for
the judgement amount. Question six asked, "What corrective
action had been taken to prevent future problems?" Question
seven asked, "What action has been taken to hold any
responsible party accountable?" Examples of actions could
be the placement of a letter into the employee's personnel
file for violation of state personnel rules. Senator Dave
Donley felt that would be appropriate. Question eight asked
existed on the current form. Question nine asked for ".any
recommendations for changes in statutes, regulations or
policy and cite any applicable statutes or regulations." He
felt that would be helpful information for the finance
committees as they reviewed the requests for judgements and
claims.
The Attorney General had expressed concerns about question
five. Senator Dave Donley could understand those concerns
and offered that separate statutes be adopted to immunize
the state from challenges by affected employees. He argued
that this would be an appropriate exception to the general
rule of confidentiality when the state was required to pay
large amounts of money because an employee violated someone
else's civil rights.
Senator Dave Donley shared a suggestion made to him by Co-
Chair Sean Parnell to possibly request a duplicate of the
Judgement Award Questionnaire form from the department that
incurred the cost. Senator Dave Donley added that he would
like future appropriation hearings to have a representative
from the affected department join the Department of Law in
testifying to the committee. Currently, he felt bad for
the Department of Law representative who had to make the
request and defend the actions of another department, who
was not present to answer questions. He felt that the
affected departments bore no responsibility and was not
held accountable because they did not have to face the
Legislature and explain their actions.
He suggested members work with him on finalizing these new
questions and that the committee adopt these as SFC
committee forms.
Senator Loren Leman liked question 8 on the first form and
wanted to include the total attorney fee along with the
hourly rate.
Co-Chair John Torgerson said Co-Chair Sean Parnell would
bring the matter up again to allow the committee to adopt
the forms and require their use for reporting purposes.
Co-Chair John Torgerson announced the next day's agenda.
The committee would hear SB 5, SB 27, SB 51 and HB 77.
ADJOURNED
Senator Torgerson adjourned the meeting at 10:06 AM
SFC-99 (1) 3/15/99
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