Legislature(1999 - 2000)
04/18/2000 09:09 AM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 18, 2000
9:09 AM
TAPES
SFC-00 # 96, Side A
CALL TO ORDER
Co-Chair John Torgerson convened the meeting at
approximately 9:09 A.M.
PRESENT Co-Chair John Torgerson, Senator Loren Leman,
Senator Randy Phillips, Senator Gary Wilken, Senator P.
Kelly, Co-Chair Parnell, Senator Adams, Senator Green,
Senator Donley.
Also Attending: REPRESENTATIVE NORMAN ROKEBERG; CAROL
CARROLL, Director, Division of Administrative Services,
Department of Military and Veterans Affairs; RON HULL,
Deputy Director, Division of Employment Security,
Department of Labor.
Attending via Teleconference: GENERAL THOMAS WESTALL,
Alaska National Guard/Naval Militia/Defense Force,
Department of Military and Veterans Affairs; MAJOR RICHARD
THOMAS, Assistant Chief of Staff, Alaska Army National
Guard, Department of Military and Veterans Affairs.
SUMMARY INFORMATION
HB 37-CIGARETTES:SALES/EDUC & CESSAT'N PROGRAM
SCS CS HB 37 (FIIN) was reported out of Committee with a
"do pass" recommendation and with a fiscal note by Senate
Finance Committee.
HB 331-AK NATL GUARD/NAVAL MILITIA/DEFENSE FORCE
CS HB 331 (MVL) was reported out of Committee with a "do
pass" recommendation and with a fiscal note by the
Department of Military and Veterans Affairs.
HB 337-AMTS OWED ON UNEMPLOYMENT TAX: CLM V. PFD
SCS CS HB 337 (FIN) was reported out of Committee with a
"do pass" recommendation and with fiscal notes by
Department of Revenue dated 2/8/00 and Department of Labor
and Workforce Development dated 1/12/00.
HB 378-FEES FOR WORKERS COMP AND WORKER SAFETY
SCS CS HB 378 (FIN) was reported out of Committee with a
"no recommendation" and with three fiscal notes by
Department of Labor and Workforce Development dated
4/17/00, Department of Administration dated 4/14/00, Office
of Management and Budget dated 4/14/00, University of
Alaska dated 3/6/00 and Department of Community & Economic
Development dated 2/2/00.
HJR 22-AK NATIVE ON PACIFIC SALMON COMMISSION
Co-Chair Torgerson noted that HJR 22 was SCHEDULED but
would not be heard. It was rescheduled for a latter time.
CS FOR HOUSE BILL NO. 331(MLV)
"An Act relating to compensation of members of the
Alaska National Guard and Alaska Naval Militia in
active service; changing the name of the Alaska State
Militia to the Alaska State Defense Force; relating to
compensation and work status for members of the Alaska
State Defense Force; and providing for an effective
date."
CAROL CARROLL, Director, Division of Administrative
Services, Department of Military and Veterans Affairs,
addressed the three changes the legislation would make to
existing law:
· The bill would streamline the process for paying
members of the Guard and Naval Militia when
called to active duty ensuring timely and
accurate pay for the soldiers.
· The bill would change the name of the Alaska
State Militia to the Alaska State Defense Force,
the name commonly used to refer to the volunteer
force.
· The bill would clarify the status of the Alaska
State Defense Force when called to State active
duty ensuring that the Defense Force has Title 26
job protection and subject to military command
and discipline.
Co-Chair Torgerson questioned the zero fiscal note given
the proposed pay increase.
Ms. Carroll responded, currently, the Alaska National Guard
is paid basic federal pay scale, which increases, by the
number of years in service. Additionally, they are paid an
allowance for cost of living. The bill clarifies that the
basic pay would be multiplied by 200% and no longer would
the pay allowances be given. The State's impact would be
that some members would be paid a little less and others,
the exact same for most members on duty. The 200% would be
an attempt to match what is currently paid. She reiterated
that the impact to the State would be minimal.
Co-Chair Torgerson noted that it was based on the federal
government basic pay and asked if the State could be out of
balance if they increase the pay rate.
Ms. Carroll explained that the State would always be
nearing what the federal government pays as it is based on
the federal basic minimum pay.
Co-Chair Torgerson asked what had been added in Sections 6
& 7.
Ms. Carroll commented that both groups would be eligible
for workman's compensation when brought on State's active
duty. Those sections speak to the workman's comp
situation.
Senator Leman questioned why Section 5 was not being
changed.
Ms. Carroll replied that it was left the same because over
the years, as the concept has changed, other things were
applicable. The Department believed that would be safer
since the impact was not known.
Senator Leman did not understand the retroactivity clause
and how that would make a difference.
Ms. Carroll agreed that it would make sense to change it,
however, the State attorney had recommended leaving that
language the same.
MAJOR RICHARD THOMAS, (Testified via Teleconference),
Assistant Chief of Staff, Alaska Army National Guard,
Department of Military and Veterans Affairs, offered to
answer any questions the Committee had regarding pay
concerns.
GENERAL THOMAS WESTALL, (Testified via Teleconfernce),
Alaska National Guard/Naval Militia/Defense Force,
Department of Military and Veterans Affairs, offered to
answer any questions from the Committee regarding the
history of the defense force and why the bill was so
important to the Department.
Senator Leman recommended that the Committee identify what
the minimum pay is for the current fiscal year and
determine what an appropriate multiplier would be.
Co-Chair Torgerson countered that he would prefer to move
the bill from Committee and address that concern on the
floor.
Co-Chair Parnell MOVED to report CS HB 331(MLV) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CS HB 331 (MVL) was reported out of Committee with a "do
pass" recommendation and with a fiscal note by the
Department of Military and Veterans Affairs.
HOUSE JOINT RESOLUTION NO. 22
Relating to the membership of the Pacific Salmon
Commission.
Co-Chair Torgerson noted that HJR 22 was scheduled but
would not be heard. The bill was rescheduled for a latter
time.
CS FOR HOUSE BILL NO. 337(JUD)
"An Act relating to claims against permanent fund
dividends to pay amounts owed to the Department of
Labor and Workforce Development under the Alaska
Employment Security Act and to fees for processing
certain claims against permanent fund dividends; and
providing for an effective date."
RON HULL, Deputy Director, Division of Employment Security,
Department of Labor, explained that his work included the
collection of taxes from Alaska's employers and the paying
out of benefits to Alaskans who are temporarily out of
work. Last year over $129 million dollars were paid out in
benefits. Inherent in the responsibility of administering
the program is the protection of the Unemployment Insurance
(UI) Trust Fund. By protection, Mr. Hull indicated that he
meant detection, prevention, and the collection of
improperly paid benefits.
Mr. Hull continued, as of 12/31/99, the overpayment
balances were as follows:
*Fraud $4,912,384
*Non-Fraud $1,516,688
*Penalty $3,145,620 (penalty for fraud)
He noted that the bill would speed the recovery of overpaid
UI benefits that are currently a debt to the State. The
overpaid benefits would be returned to the Trust Fund,
which have a beneficial effect on the employers' UI tax
rates. The penalty amount would be deposited into the
General Fund.
Mr. Hull added that with passage of the legislation, the
Department estimates in the first year a return of over
$1.5 million dollars to the Trust Fund, and over $750
thousand dollars to the General Fund. Every year
thereafter, it is estimated between $700 - $800 thousand
dollars would be returned to the Trust Fund and between
$400 - $500 thousand dollars would be deposited in the
General Fund.
Mr. Hull concluded that passage of the bill would be good
for the UI Trust Fund, the General Fund and for Alaska's
employers.
Co-Chair Torgerson asked what currently happens with the
debt.
Mr. Hull noted that much of the balance goes uncollected.
The method most used for collecting is in the case of
someone reapplying for benefits in the future, then they
can be tracked.
Co-Chair Torgerson asked why it is not taken to Small
Claims Court.
Mr. Hull advised that sometimes it is taken to Small Claims
Court and from time to time to Criminal Court.
Senator Adams pointed out that the limit had been raised to
$20 thousand dollars. He asked if that could be used for
the State's advantage.
Mr. Hull did not know. He reminded members that this work
is labor-intensive and the problem continues of getting the
money to the Trust or General Fund.
Co-Chair Torgerson countered that if the case went to
court, the judgement could be taken and filed against the
Permanent Dividend check.
Co-Chair Torgerson observed that then the bill would
provide for no court action, and instead, go directly to
the attachment.
Mr. Hull explained that it would but the Department wants
to be in the same category as other State agencies so as to
levy these funds.
Co-Chair Parnell questioned the need of the State to
continue to expand the scope of the State's ability to
assume action on the PFD.
Mr. Hull stressed that arrangement is "good" for all State
Divisions.
Co-Chair Parnell questioned what is "good" State policy,
while not going through "due process".
Mr. Hull replied that all agencies are required to go
through that process, referencing the Child Support
Enforcement Agency (CSEA). Mr. Hull questioned why it was
not "good" policy to collect State debt.
Senator Parnell repeated his question of why the State
should be allowed to take action without going to court.
Mr. Hull responded that it was a debt to the State.
Senator Wilken asked how it was determined who would file
against the PFD for money in dispute.
Mr. Hull stated if any amount was in dispute, the agency
would not be allowed to move forward as written in current
statute. He noted that there exists an administrative
appeals process for court actions.
Co-Chair Torgerson referenced Page 2, Lines 9-13, asking if
those actions would be addressed through the use of social
security numbers. He questioned the "broad based" language
used.
Mr. Hull explained that the language would bring the
Department in compliance with requirements that the
Department of Revenue had established.
Co-Chair Parnell pointed out that for PFD purposes, often a
birthdate is needed. Some people do not have social
security numbers yet and that alternate forms of
identification can be used.
Co-Chair Torgerson assumed that the people referenced in
the legislation would be old enough to be working;
otherwise, the provision would not apply to them.
Co-Chair Torgerson inquired if the notices were sent
registered mail.
Mr. Hull replied that they are sent through regular mail.
Senator Parnell asked if the State indicates notice of the
"right to appeal".
Mr. Hull explained that there are a number of documents
sent. The first document is send to the claimant and the
employer. If funds are owed, the claimant receives a
letter of determination, which contains that document.
Senator Parnell reiterated his question, if the claimant
received notice of the right to appeal for any decision.
Mr. Hull advised that the claimant does receive such a
packet, which explains how to place those appeals.
Senator Leman offered three minor technical amendments.
Page 3, Line 26, delete "interpret"; Page 3, Line 29,
transpose the words "only include"; Page 4, Line 6 & 7,
delete "interpret for". Senator Leman MOVED to adopt those
language changes. There being NO OBJECTION, the amendments
were incorporated.
Co-Chair Parnell MOVED to report SCS CS HB 337 (FIN) out of
Committee with individual recommendations and with fiscal
notes by Department of Revenue and Department of Labor and
Workforce Development. There being NO OBJECTION, it was so
ordered.
Co-Chair Torgerson stated that SCS CS HB 337 (FIN) was
reported out of Committee with a "do pass" recommendation
and with fiscal notes by Department of Revenue dated 2/8/00
and Department of Labor and Workforce Development dated
1/12/00.
SENATE CS FOR CS FOR HOUSE BILL NO. 37(JUD)
"An Act relating to restricting sale of cigarettes, to
enforcement of certain laws relating to sales of
cigarettes, and to smoking education and cessation
programs administered by the Department of Health and
Social Services."
REPRESENTATIVE NORMAN ROKEBERG testified that the
legislation would authorize a comprehensive smoking
education, tobacco use prevention and tobacco control
program. It would ensure that non-State contractors
administer the tobacco education prevention. Approximately
$816 million dollars in tobacco settlement monies will be
forthcoming to the State. He noted that the Department of
Health and Social Services would monitor private tobacco
settlement contracts.
Representative Rokeberg stated that HB 37 outlines a
comprehensive tobacco control program based on the Center
for Disease Control guidelines. The bill would prohibit
sales of cigarettes in-groups of less than 20, not in their
original packaging, and not properly labeled for sale in
the states. He noted that it was his intent that upon
passage of the bill, contractual agreements would be made
with organizations such as the American Cancer Society, to
implement the program. The Department of Health and Social
Services would be responsible for the oversight.
Representative Rokeberg stated that the State of Alaska
does not need to contribute government bureaucracy by
burdening the State with additional programmatic duties.
Senator Wilken questioned the fiscal note. He asked if the
hire of one full time equivalent was necessary.
Representative Rokeberg replied that there was another
fiscal note that he and Senator Parnell had prepared a note
that zeroed out that position.
Co-Chair Torgerson understood that the Department of Health
and Social Services would like to have more money in that
program, which the fiscal note reflects.
Co-Chair Parnell spoke to Amendment #1, 1-LS0247/B.1, Ford,
4/13/00. He stated that the amendment would address
language on Page 5, Line 5, deleting "more than one
organization" and inserting "one or more organizations".
Representative Rokeberg voiced his support for the
amendment.
Senator Leman stated that he would support the amendment
with the current dollar amount. He clarified that he
supported competition for securing the contract.
Senator Green stated that she could not support the
amendment. She believed that there are organizations
currently in place that should be eligible to directly
receive funding and should not be required to go through
another agency or beneficiary.
Co-Chair Parnell noted that was possible with the proposed
amendment language.
Senator Green OBJECTED to Amendment #1.
A roll call vote was taken on the motion.
IN FAVOR: Donley, Leman, Adams, Wilken, Phillips,
Parnell, Torgerson
OPPOSED: P. Kelly, Green
The MOTION PASSED (7-2).
Co-Chair Parnell MOVED to adopt the fiscal note dated
4/15/00 as provided by the Senate Finance Committee. There
being NO OBJECTION, it was adopted.
Co-Chair Parnell MOVED to report SCS CSHB 37 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
SCS CS HB 37 (FIIN) was reported out of Committee with a
"do pass" recommendation and with a fiscal note by Senate
Finance Committee.
SENATE CS FOR CS FOR HOUSE BILL NO. 378(FIN)
"An Act relating to the establishment of, assessment
of, collection of, and accounting for service fees for
state administration of workers' compensation and
workers' safety programs; establishing civil penalties
and sanctions for late payment or nonpayment of the
service fee; and providing for an effective date."
Co-Chair Torgerson commented that at the previous Committee
meeting, there had been no motion to move HB 378 out of
Committee. He asked if there was any Committee member that
wanted to move the bill from the Committee at this time.
Co-Chair Parnell MOVED to report SCS CS HB 378 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTIONS, it
was so ordered.
SCS CS HB 378 (FIN) was reported out of Committee with a
"no recommendation" and with three fiscal notes by
Department of Labor and Workforce Development dated
4/17/00, Department of Administration dated 4/14/00, Office
of Management and Budget dated 4/14/00, University of
Alaska dated 3/6/00 and Department of Community & Economic
Development dated 2/2/00.
ADJOURNED
Senator Torgerson adjourned the meeting at 9:50 A.M.
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