Legislature(1993 - 1994)
03/30/1994 01:48 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE JUDICIARY COMMITTEE March 30, 1994 1:48 p.m. MEMBERS PRESENT Senator Robin Taylor, Chairman Senator Rick Halford, Vice-Chairman Senator George Jacko Senator Dave Donley Senator Suzanne Little MEMBERS ABSENT All members present COMMITTEE CALENDAR HOUSE CONCURRENT RESOLUTION NO. 29 am Relating to the military operations areas environmental impact statement of the United States Air Force. SENATE BILL NO. 213 "An Act extending the Alaska Public Utilities Commission and the regulatory cost charge." SENATE BILL NO. 228 "An Act relating to bail after conviction for various felonies if the defendant has certain previous felony convictions." SENATE JOINT RESOLUTION NO. 8 Proposing amendments to the Constitution of the State of Alaska relating to capital projects and loan appropriations, and to the expenditure limit. SENATE BILL NO. 280 "An Act establishing the Afognak Island State Park." CS FOR HOUSE BILL NO. 254(JUD) am(ct rule fld) "An Act relating to open meetings of governmental bodies." SENATE BILL NO. 292 "An Act relating to transfers of prisoners under the Interstate Corrections Compact." PREVIOUS SENATE COMMITTEE ACTION HCR 29 - See State Affairs minutes dated 3/9/94 and 3/11/94. SB 213 - See Labor & Commerce minutes dated 9/28/93, 2/8/94, 2/24/94, 3/10/94 and 3/15/94. SB 228 - No previous action to record. SJR 8 - See State Affairs minutes dated 1/27/93. See Judiciary minutes dated 2/15/93, 2/19/93, 2/22/93, 2/22/93, 3/28/94. SB 280 - See State Affairs minutes dated 3/2/94. See Resources minutes dated 3/14/94. HB 254 - See Judiciary minutes dated 3/9/94, 3/16/94, 3/21/94, 3/28/94. SB 292 - See Judiciary minutes dated 3/23/94. WITNESS REGISTER Walt Wilcox, Staff to Representative Jeannette James State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Offered information on HCR 29 am Josh Fink, Aide to Senate Labor & Commerce Committee State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Offered information on CSSB 213(L&C) Dave Hutchens, Executive Director Alaska Rural Electric Cooperative Association 703 West Tudor Road, #200 Anchorage, AK 99503 POSITION STATEMENT: Testified on CSSB 213(L&C) Don Schroer, Chairman Alaska Public Utilities Commission 1016 W. 6th, Suite 400 Anchorage, AK 99504-1963 POSITION STATEMENT: Testified on CSSB 213(L&C) Senator Judy Salo State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Prime Sponsor of SB 228 Craig Tillery, Assistant Attorney General Department of Law 1031 W. 4th, Suite 200 Anchorage, AK 99501-1994 POSITION STATEMENT: Testified in support of SB 280 ACTION NARRATIVE TAPE 94-28, SIDE A Number 001 S/JUD - 3/30/94 CHAIRMAN ROBIN TAYLOR called the Judiciary Committee meeting to order at 1:48 p.m. He brought HCR 29 am (COMMEND AIR FORCE: ENVIR R IMPACT STATEMENT) before the committee as the first order of business. WALT WILCOX, staff to Representative Jeannette James, explained the resolution shows support for the military in Alaska and further demonstrates appreciation of their policy of involving and informing the public of military activities. Specifically, it thanks the military for involving the public in the preparation of an environmental impact statement. Number 030 SENATOR TAYLOR directed attention to an amendment to page 2, line 3, adding the phrase "endorses the proposal of the United State Air Force and." Mr. Wilcox stated that Representative James endorses the amendment. Number 050 SENATOR JACKO asked for an explanation of the issue of environmental concern for the air space. MR. WILCOX related that military has an experimental area up toward Fort Yukon all the way down to Talkeetna where they are overflying experimental aircraft and doing bombing test missions. They have involved the public for input into what they are doing as far as noise levels and the impact on the various communities within the area. Number 095 SENATOR JACKO moved the adoption of the following amendment: Page 2, line 3: After "Legislature" insert "endorses the proposal of the United States Air Force and" SENATOR LITTLE objected. There was debate among committee members on whether inserting the word "endorses" means that the Legislature would be endorsing the proposal or whether it would be endorsing the environmental impact statement. Senator Little maintained her objection, and a roll call vote was taken with the following result: Senators Taylor, Jacko voted "Yea" and Senators Donley and Little voted "Nay." The Chairman stated the motion failed. Number 224 SENATOR TAYLOR asked for the pleasure of the committee. SENATOR JACKO moved that HCR 29 am be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 230 S/JUD - 3/30/94 SENATOR TAYLOR brought SB 213 (APUC EXTENSION AND REGULATORY COST CHARGE) before the committee as the next order of business. JOSH FINK, aide to the Senate Labor & Commerce Committee, addressed changes made to the original bill in the Labor & Commerce CS. In Section 1, the maximum ceiling on the regulatory cost charge was raised from .61 percent of gross revenues to .8. The change in Section 1 was necessitated by the change in Section 2. In Section 2, the cost of power is deleted from electric utilities' gross revenues prior to the application of the regulatory cost charge. Mr. Fink explained that according to the auditor the percent workload committed to electric utilities is about 34 percent. At the time the audit was done, the RCC was at 5.77 percent. The auditor asserted that $192,000 was over collected from electric utilities, that they were being over collected from and there needed to be an adjustment made. Speaking to Section 3, Mr. Fink explained that currently with the regulatory cost there are four quarters that the charges are submitted by the utilities to the Commission. The fourth quarter charges come in after the beginning of the new fiscal year, so if the Commission has overcharged on the regulatory cost charge, that money should count against the following year's cost, but instead it has been lapsing into the general fund. The auditor recommended that the Department of Administration be allowed to earmark that money so that the Legislature can reappropriate in the next fiscal year which will reduce the regulatory cost charge. Number 308 SENATOR DONLEY asked if the audit report included any other utilities. MR. FINK acknowledged that it did, however, the electric utilities were particularly concerned about the over collections so the committee felt that should be addressed, but the other utilities did not bring forward any concerns. Number 370 Addressing Section 4, MR. FINK pointed out that currently, if a regulated utility wants to opt out and 10 percent of the first 5,000 and 3 percent after the first 5,000 subscribers sign a petition, an election will be held. To opt in to become a regulated utility, 25 percent of the subscribers must sign a petition to get an election. The auditor recommended the opt in and opt out procedures be the same, and the change in Section 4 accomplishes that recommendation. Section 5 increases the threshold of gross revenues for an electric or telephone utility before a utility needs to be regulated by changing the amount from $325,000 to $500,000. This was also a change recommended by the auditor, so that small utilities are not as closely regulated as large utilities. Section 6 increases the threshold of gross revenues for other utilities from $100,000 to $150,000 before they need to be regulated. Section 7 increases the threshold of gross revenues for refuse collection utilities from $200,000 to $300,000. It also applies the same opt in standards provided in Section 4. Section 8 makes it easier for the consumers to get an election for cable by changing it from 25 percent of the subscribers to 10 percent of the subscribers. Section 9 is a technical conforming section. Section 10 raises the regulatory cost charge for pipeline carriers from .61 percent to .8 percent for the same rationale that applies to Section 1. Section 11 identifies over collection from the pipeline carrier's regulatory cost charge so that it may be applied to the next year to reduce the regulatory cost charge. Section 12 is an extension of the Alaska Public Utilities Commission from June 30, 1994, to June 30, 1998. Section 13 repeals the sunset of the regulatory cost charges, the rationale being that when the Commission is under sunset review, the regulatory cost charge can be addressed at that time. When the regulatory cost charge was passed it set a sunset date of December 31, 1994, exclusive of the APUC sunset. Section 14 staggers the terms of the members of the Alaska Public Utilities Commission. Currently, two members of the commission terms expire on the same year. The section was drafted so that it won't affect any current sitting members, but will apply to the next round of appointments. Right now, one of the consumer seats and one of the engineering seats expire at the same time. Number 505 DAVE HUTCHENS, Executive Director, Alaska Rural Electric Cooperative Association, stated that there were issues related to the legislation that he wanted to address. The first issue is whether or not the APUC should be extended, and ARECA's view is that should be. APUC was created with the charge of separating out the service areas and to protect the consumer interest. The second issue relates to the section in the committee substitute which relates to the regulatory cost charge formula. He said the at the present time, the regulatory cost charge is based on a flat charge per revenue, and the workload and the revenue requirements from RCC don't match very well. The change to the formula was recommended by ARECA. He directed attention to and reviewed a handout containing a summary of the changes that would result from changing the RCC. TAPE 94-28, SIDE B Number 010 The third issue relates to Section 1 of the proposed Judiciary CS, which would eliminate the phrase "liberally construed" from the present APUC statute and replace it with the directive that their statutes be "those specifically conferred by statute or necessarily implied by a statutory grant of authority." ARECA believes that it important that the powers of the Commission be those that the Legislature determines them to be; that the Commission should not be able to expand their authority by interpretation and by liberally construing their powers. Mr. Hutchens emphasized that ARECA does not have a problem with the present Commission, but they see this as preventative maintenance to keep from having problems in the future. Also, he suggested an effective date be added making Section 1 effective July 1, l995, which would give the Commission time to come back to the Legislature with a list of the things that they don't have clear statutory authority to do, but that they are now doing. The items on that list that the Legislature agrees with could be enacted next year before this would go into effect. Number 055 DON SCHROER, Chairman, Alaska Public Utilities Commission, stated that aside from the "liberally construed" section, the Commission doesn't have any large objections to the bill. Number 063 SENATOR TAYLOR asked Mr. Schroer, for the record, except for Section 1, did APUC agree with the housekeeping measures contained in the committee substitute, and MR. SCHROER acknowledged that they do. MR. SCHROER said the APUC has no quarrel whether they are financed by RCC or under the general fund. Their goal is to keep it as simple as possible. They have it working now, and they have done so without asking for additional funding. Number 086 MR. SCHROER requested that the following statement on the "liberally construed" language be included as part of the record: "HB 213 would extend the Alaska Public Utilities Commission and the Regulatory Cost Charge that funds it until 1998. An amendment may be proposed to delete the phrase "liberally construed" from he Commission's enabling statute. The Commission opposes this amendment." "Routinely the Commission allows interim rates to go into effect without requiring the utility to escrow funds or pose a bond under AS 42.05.421(c). It does this by making rates interim refundable, which again benefits the utility. The authority for this is "liberally construed." "The courts have not used the term "liberally construed" very often (only eight times). Where they have, it has been to the benefit of utilities in half of the cases." "The Commission itself has only discussed the issue of "liberally construed" nine times in 25 years. In at least three of these cases, the Commission acted to allow the intention of the utility or applicant for a certificate to be accomplished by waiving technical irregularities. In another, the Commission found that it did not have statutory authority to recognize a doctrine of "retained rights" requested by a telephone utility under statute, despite "liberally construed." "Often the Commission has granted "temporary operating authority" to a utility while its application for a certificate is pending Both the customers and the utility benefit, but the authority for temporary certificates is not explicit. It comes from "liberally construed." "Many utilities face increased competition as the result of changes in technology and federal law. The Commission needs the flexibility that "liberally construed" provides to allow existing utilities to compete on an equal footing." "Regulatory statutes are generally drafted broadly. Legislators cannot foresee every problem that will arise in administering a statute and the liberally construed language gives regulators the flexibility to resolve these problems. The Legislature sets the goals and the policies, leaving the implementation of the program to the commission. The budget process and the sunset review process provide plenty of room for legislative oversight." "Justice Frankfurter recognized that administrative agencies were created to perform a task, which neither courts nor legislatures could accomplish, to regulate the practices of industries in a rapidly changing world. The same considerations that led to the creation of the Public Utilities Commission led the Legislature to authorize their implied powers to be liberally construed." "Deletion of this phrase would lead to strict construction of implied powers. This means that legislation would be required whenever a court finds a gap in an agency's power. This forces the Legislature back into the regulatory role that they sought to escape by creating the Commission in the first place. Removing "liberally construed" from the Commission's powers and duties section would have impacts well beyond statutory construction in the courts." Number 090 Mr. Schroer recommended that if the "liberally construed" language is removed from the bill that other changes be made in the statute. If that language is removed, the Commission will not be able to give any temporary operating authority as they have done in the past. Also, when a utility asks for a rate increase, the APUC makes them in term refundable. The law provides for them to be in term, but then the utility must put up a bond or set up an escrow. The Commission liberally construes that's not necessary. Mr Schroer stated he doesn't believe that any utility has ever suffered because of the "liberally construed" language, and he doesn't see any reason to change it when there hasn't been any problem with it. Number 150 SENATOR TAYLOR asked if there was a motion to adopt the Judiciary CS. SENATOR HALFORD moved that CSSB 213(JUD) be adopted. SENATOR DONLEY objected and asked that the differences in the committee substitute be outlined. Number 180 There was discussion on adding an effective date to the legislation, as well as discussion on the section relating to staggered terms. Number 235 SENATOR DONLEY maintained his objection to the adoption of CSSB 213(JUD) stating he agrees with Mr. Schroer that the APUC needs the "liberally construed" authority. SENATOR HALFORD suggested adding the one-year delayed effective date so that APUC could come back with a proposal. The Chairman called for a roll call vote on the motion to adopt the committee substitute: Senators Halford, Jacko and Taylor voted "Yea" and Senators Little and Donley voted "Nay." The Chairman stated the motion carried. Number 285 SENATOR Taylor moved that an effective date of July 1, 1994 be added to the committee substitute. Hearing no objection, the amendment was adopted. Number 306 SENATOR DONLEY moved that Section 1 of the committee substitute be deleted. SENATOR HALFORD objected. The roll was taken with the following result: Senator Donley voted "Yea" and Senators Jacko, Little, Taylor and Halford voted "Nay." The Chairman stated the motion failed. Number 335 SENATOR HALFORD moved that an effective date for Section 1 of July 1, 1995 be added. Hearing no objection, the Chairman stated the amendment was adopted. Number 372 SENATOR DONLEY proposed a conceptual amendment to set out a separate section for cable television regulation that would automatically put cable television under the APUC except if they follow the opt-out procedure. SENATOR HALFORD voiced his concern with regulating cable television and what the cost of it would be. The committee then discussed a conceptual amendment that would take away cable television's monopoly. SENATOR TAYLOR stated the conceptual amendment was to remove from regulation cable television, which would remove from the authority of the APUC the opportunity to regulate the geographic area, or the basic package, or entry. SENATOR DONLEY questioned how this would affect FCC requirements. SENATOR TAYLOR directed staff to request a legal opinion as well as draft language on the conceptual amendment. Number 540 SENATOR DONLEY said he wanted to propose a conceptual amendment to delete the portions of the bill that create a dichotomy between electrical utilities and other utilities. He then moved to delete Sections 2, 3 & 11 of the draft committee substitute. SENATOR JACKO objected. The roll was taken with the following result: Senator Donley voted "Yea" and Senators Jacko, Little, Taylor and Halford voted "Nay." The Chairman stated the motion failed. There being no further amendments to the bill, SENATOR TAYLOR stated SB 213 would be held to get a response back on the question of cable television, as well as additional drafting to the committee substitute. TAPE 94-29, SIDE A Number 001 S/JUD - 3/30/94 SENATOR TAYLOR brought SB 228 (NO BAIL FOR FELONS W/PREVIOUS CONVICTIONS) before the committee as the next order of business. SENATOR JUDY SALO, prime sponsor of SB 228, spoke to concern in her district about a man with a very long list of violent crime, both in California and Alaska, who was tried, convicted and sentenced for a felony drug conviction and then pending appeal was released on a $5,000 bail. After being released on bail, he violently sexually assaulted two more women. SB 228 would prevent this from happening again. Senator Salo explained that the legislation has two sections. Section 1 says that this is a matter of substance, not a court change rule change and, therefore, a two-thirds vote is not required. Section 2 adds to the list for which bail is already denied sexual assault in the second and third degree, sexual abuse of a minor in the second or third degree, and stalking. After conviction, pending sentencing, and after sentencing, pending appeal, bail would not be allowed. Number 120 SENATOR LITTLE moved that SB 228 be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 185 S/JUD - 3/30/94 SENATOR TAYLOR brought SB 280 (ESTABLISH AFOGNAK ISLAND STATE PARK) K) before the committee as the next order of business. He directed attention to backup material and explained it is the legislation by which the State of Alaska would accept the areas (shaded in yellow on the front of the material) that are being purchased from the Native corporation by the federal government, through the trustees, utilizing funds from the Exxon oil sale. He also noted there was a draft committee substitute before the committee for its consideration. CRAIG TILLERY, Assistant Attorney General, Department of Law, stated he works with the trustee council and was involved in doing the work on the purchase of the land. He explained the land was acquired by the Exxon Valdez Trustee Council, and it was land that was originally sought by the Department of Interior for inclusion in a nearby national wildlife refuge. The state trustees on the Trustee Council objected to that, indicating their views that the land had much more in common with nearby Shuyak State Park, and they requested that the state be given the opportunity to acquire the land. It was agreed that the state would have that opportunity, that they would have one year from the date of purchase in order to include the land within a state park. The purchase was completed on November 23, 1993, and, if the land is to come within state ownership, the Legislature must create the park by November of this year. Mr. Tillery pointed out that SB 280 has received wide support from the Kodiak Island Borough, the City of Kodiak, the Kodiak Chamber of Commerce, a variety of fishing groups, timber groups, etc. Mr. Tillery said the bill has provisions in it which say that the status as a state park shall not impair uses of owners of land nearby or adjacent to the state park. He added there is no intent to interfere with valid existing rights which would include the road use agreement. The bill also contains a mandatory section that requires reasonable access for hunting, fishing, trapping, etc. Mr. Tillery noted that Senator Taylor had asked that the department look into the issue of the cost this acquisition might have in terms of jobs. He said the mayor and the people in Kodiak view this as a job enhancer. The money that was paid to the Native corporation is being put in trust fund for use by the people for the development and sustaining of jobs. Number 314 SENATOR LITTLE asked for Mr. Tillery's comments on the proposed committee substitute. MR. TILLERY said he didn't think the committee substitute changes any of the legal descriptions or the uses of the land. He said it deals with a matter not particularly connected with Afognak Island State Park in the sense that it appears to adopt a no net loss policy for multiple use lands. He added that it would not invalidate the deal with the state and the Trustee Council. Number 345 SENATOR HALFORD moved that CSSB 280(JUD) be adopted. SENATOR LITTLE objected, stating that she disagrees with some of the findings in the bill, and she disagrees that when designating additional park land that it requires removing that same amount of acreage from park designation. SENATOR TAYLOR responded that he didn't know how in good faith to the public we could possibly accept and create another 44,000 acres of park lands when we can't even manage 18 parks that already have some level of development in them. He added that if this is precious enough property that we need to go get it, then we should be willing to say to the public that we're going to do something with this one, and we should give up some of the ones that we currently can no longer afford to maintain. SENATOR TAYLOR stated there would be roll call vote on Senator Halford's motion to adopt the committee substitute. The roll was taken with the following result: Senators Jacko, Taylor, Halford voted "Yea" and Senator Little voted "Nay." The Chairman stated CSSB 280(JUD) was adopted. Number 385 SENATOR JACKO moved that CSSB 280(JUD) be passed out of committee with individual recommendations. SENATOR LITTLE objected. The roll was taken with the following result: Senators Jacko, Halford and Taylor voted "Yea" and Senator Little voted "Nay." The Chairman stated the motion carried. Number 410 S/JUD - 3/30/94 SENATOR TAYLOR brought SJR 8 (CAPITAL PROJECTS/EXPENDITURE LIMIT) before the committee as the next order of business. Kevin Sullivan, staff to the Senate Judiciary Committee, explained the committee substitute incorporates the amendments adopted at the previous hearing on the legislation. It repeals the existing appropriation limit in the Alaska Constitution, changes the effective dates, and changes the inflation rate from 6 percent to 3 percent. SENATOR HALFORD moved that CSSJR 8(JUD) be adopted. SENATOR JACKO objected. The roll was taken with the following result: Senators Little, Halford and Taylor voted "Yea" and Senator Jacko voted "Nay." The Chairman stated the committee substitute was adopted. SENATOR HALFORD moved that CSSJR 8(JUD) be passed out of committee with individual recommendations. SENATOR JACKO objected. The roll was taken with the following result: Senators Taylor, Halford voted "Yea" and Senators Little and Jacko voted "Nay." The Chairman stated the motion to move the legislation out of committee failed. Number 490 S/JUD - 3/30/94 SENATOR TAYLOR brought CSHB 254(JUD) am(ct rule fld) (OPEN MEETING G ACT) before the committee as the next order of business. SENATOR TAYLOR moved an amendment to delete the Legislature from the Open Meeting Act and to establish a committee to develop guidelines for the conduct for open meetings adapted to the special needs of the Legislature. SENATOR JACKO stated his support for the amendment. Hearing no objection, the amendment was adopted. There being no further amendments or testimony on HB 254, SENATOR TAYLOR asked for the pleasure of the committee. SENATOR HALFORD moved that SCS CSHB 254(JUD), as amended, (Draft 8\LS0859\T) be adopted. Hearing no objection, the motion carried. SENATOR JACKO moved that SCS CSHB 254(JUD), as amended, be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 525 S/JUD - 3/30/94 SENATOR TAYLOR brought SB 292 (INTERSTATE TRANSFERS OF INMATES) before the committee as the final order of business. He said Senator Frank has requested that action be taken on the bill, which had a previous hearing by the committee on March 23. TAPE 92-29, SIDE B Number 002 There being no testimony on SB 292, SENATOR TAYLOR asked for the pleasure of the committee. SENATOR JACKO moved that SB 292 be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. There being no further business to come before the committee, the meeting was adjourned at 4:15 p.m.