Legislature(1993 - 1994)

04/13/1994 08:45 AM MIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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                             MINUTES                                           
                    SENATE FINANCE COMMITTEE                                   
                         April 13, 1994                                        
                            8:45 a.m.                                          
  TAPES                                                                        
                                                                               
  SFC-94, #60, Side 1 (338-end)                                                
  SFC-94, #60, Side 2 (575-338)                                                
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-chair Drue  Pearce convened the meeting  at approximately                 
  8:45 a.m.                                                                    
                                                                               
  PRESENT                                                                      
                                                                               
  In  addition  to  Co-chair Pearce,  Senators  Jacko,  Kelly,                 
  Kerttula, and Sharp  were present.   Senator Rieger  arrived                 
  soon after the meeting began.  Co-chair Frank arrived as the                 
  meeting was in progress.                                                     
                                                                               
  ALSO  ATTENDING:    Senator  Salo;  Senator  Adams;  Senator                 
  Duncan;  Senator  Ellis;  Jim  Baldwin,  Assistant  Attorney                 
  General, Dept. of  Law; Shelby Stastny, Director,  Office of                 
  Management and Budget; Dave Skidmore, aide to Senator Frank;                 
  and  aides to  committee  members and  other members  of the                 
  legislature.                                                                 
                                                                               
  SUMMARY INFORMATION                                                          
                                                                               
  SB 228 -  NO BAIL FOR FELONS W/PREVIOUS CONVICTIONS                          
                                                                               
            Testimony was presented by Senator Salo.  The bill                 
            was  then  REPORTED OUT  of  committee with  a "do                 
            pass" recommendation  and zero  fiscal notes  from                 
            the Dept.  of Corrections, Dept. of Public Safety,                 
            Dept.  of Law, and  Dept. of Administration (PDA),                 
            and Dept. of Administration (OPA).                                 
                                                                               
  SB 292 -  INTERSTATE TRANSFERS OF INMATES                                    
                                                                               
            Testimony was presented by Dave  Skidmore, aide to                 
            Senator Frank.  The bill was  then REPORTED OUT of                 
            committee with a "do pass" recommendation and zero                 
            fiscal notes from the Dept. of Corrections and the                 
            Dept. of Public Safety.                                            
                                                                               
  SB 373 -  "S.A.F.E." COMMISSION                                              
                                                                               
            Background  information  was  provided by  Senator                 
            Kelly and discussion  was had among members.   The                 
            bill  was  subsequently  HELD  in  a  subcommittee                 
            consisting of Senators Kelly, Rieger, and Sharp.                   
                                                                               
                                                                               
  HB 505 -  APPROP: BRF TO GEN.FUND; EDUCATION AID                             
                                                                               
            Draft SCS  CSHB 505  (Fin), version  "M," 4/13/94,                 
            was adopted.  Discussion was  had with Jim Baldwin                 
            and  Shelby  Stastny.    SCS  CSHB 505  (Fin)  was                 
            REPORTED   OUT  of  committee  with  a  "do  pass"                 
            recommendation.                                                    
                                                                               
                                                                               
  SB 228 - NO BAIL FOR FELONS W/PREVIOUS CONVICTIONS                           
                                                                               
  Co-chair  Pearce  directed that  SB  228 be  brought  on for                 
  discussion.    SENATOR  SALO,  sponsor of  the  legislation,                 
  explained that current statutes allow for denial of bail for                 
  unclassified or class A  felonies.  The proposed  bill would                 
  add sexual assault  and sexual abuse of a minor  to the list                 
  of crimes for which bail is denied.  Senator Salo referenced                 
  an incident in her  district involving a man convicted  of a                 
  long list of violent crimes  (including three rapes) who was                 
  tried, convicted, and  sentenced on  felony drug  possession                 
  but released on $5,000 bail pending  appeal.  While on bail,                 
  the  offender violently sexually  assaulted two  more women.                 
  The proposed bill  would prevent that from  happening in the                 
  future.                                                                      
                                                                               
  Co-chair  Pearce  referenced  the accompanying  zero  fiscal                 
  notes  and  pointed specifically  to  assumptions associated                 
  with  the Dept.  of  Corrections note  that  time served  in                 
  custody  prior to sentencing  counts as  time served  on the                 
  sentence.  Total  time served and  the cost will remain  the                 
  same whether or not it is interrupted or delayed by bail.                    
                                                                               
  Senator  Jacko  pointed  to page  2,  line  4, and  inquired                 
  concerning the statutory citations.   Senator Salo explained                 
  that AS 11.41.260 relates to stalking,  a class B felony; AS                 
  11.41.420 is sexual assault in the  second degree, a class B                 
  felony; AS 11.41.425 is sexual  assault in the third degree,                 
  a class C  felony; AS 11.41.436  and AS 11.41.438 relate  to                 
  sexual abuse of  a minor  in the second  and third  degree--                 
  class B and C felonies.  Bail is presently allowed for those                 
  categories  although  it  is  not allowed  for  class  A  or                 
  unclassified felonies.                                                       
                                                                               
  Senator Kerttula took  exception to  the zero fiscal  notes.                 
  He  advised that while he supports  the bill, it is not good                 
  policy to fail to reflect actual costs on fiscal notes.                      
                                                                               
  Senator Salo noted  that a convicted  criminal, such as  the                 
  individual earlier cited,  in most  instances, would not  be                 
  released  on  bail.    The  latitude  for  release  remains,                 
  however.  It should be extinguished.                                         
                                                                               
  Co-chair Pearce called for additional testimony on the bill.                 
                                                                               
                                                                               
  None was forthcoming.                                                        
                                                                               
  Senator  Rieger MOVED that  SB 228 pass  from committee with                 
  individual  recommendations.    No   objection  having  been                 
  raised,  SB 228  was  REPORTED OUT  of  committee with  zero                 
  fiscal notes  from the Dept.  of Corrections, Dept.  of Law,                 
  Dept. of Public  Safety, Dept. of Administration  (PDA), and                 
  Dept. of Administration  (OPA).  All members  present signed                 
  the committee report  with a "do pass" recommendation.   Co-                 
  chair  Frank  and  Senator  Kerttula  were absent  from  the                 
  meeting and did not sign the report.                                         
                                                                               
                                                                               
  SB 292 - INTERSTATE TRANSFERS OF INMATES                                     
                                                                               
  Co-chair  Pearce directed  that  SB 292  be  brought on  for                 
  discussion.   DAVID SKIDMORE,  aide to  Senator Frank,  came                 
  before committee.   He  explained that  the commissioner  of                 
  corrections presently  has statutory  authority to  transfer                 
  inmates out of  state if  he determines transfer  is in  the                 
  best interest of the state.  Statutes provide two  different                 
  standards  for determining whether  an individual inmate may                 
  be transferred.   AS 33.30.061(b)  provides a positive  test                 
  allowing transfer  if rehabilitation and  treatment will not                 
  be  impaired.    However,  an   introductory  clause  in  AS                 
  33.36.010  relating to  the interstate  corrections compact,                 
  provides a negative  test, saying  that corrections may  not                 
  transfer  an  inmate  if  his   or  her  rehabilitation  and                 
  treatment will  be better  facilitated inside  Alaska.   The                 
  proposed  bill  resolves   the  conflicting  standards   and                 
  establishes  one  test.   It  deletes  the  more restrictive                 
  standard and substitutes the less restrictive standard.                      
                                                                               
  Co-chair  Pearce  inquired concerning  the  impetus  for the                 
  bill.   Mr.  Skidmore explained  that  it was  suggested  by                 
  Michael Stark  of the  Dept. of  Law.  Conflicting  statutes                 
  have created a problem with past transfers.                                  
                                                                               
  Co-chair Pearce called for additional testimony on the bill.                 
  None was forthcoming.                                                        
                                                                               
  Senator Rieger MOVED  that SB 292  pass from committee  with                 
  individual  recommendations.    No  objection  having   been                 
  raised, SB  292  was REPORTED  OUT  of committee  with  zero                 
  fiscal  notes from  The Dept.  of Corrections  and  Dept. of                 
  Public Safety.   All  members present  signed the  committee                 
  report with a  "do pass"  recommendation.  Senator  Kerttula                 
  was absent from the meeting and did not sign.                                
                                                                               
                                                                               
  SB 373 - "S.A.F.E." COMMISSION                                               
                                                                               
                                                                               
  Co-chair  Pearce  directed that  SB  373 be  brought  on for                 
  discussion and explained that it was introduced by committee                 
  in  response  to  an earlier  presentation  by  Commonwealth                 
  North.    Senator  Kelly  explained   that  the  bill  would                 
  establish a citizens' commission to begin developing a long-                 
  range fiscal plan for the state.                                             
                                                                               
  Directing attention  to Sec.  2, Senator Kelly  acknowledged                 
  questions of  constitutionality.   He  indicated  that  even                 
  without the Sec.  2 mandate upon  the legislature, the  bill                 
  has merit  and deserves  support.   Both Co-chair  Frank and                 
  Senator Jacko voiced concern regarding Sec. 2.                               
                                                                               
  Co-chair Pearce voiced  her intent to place  the legislation                 
  in  a  subcommittee  under Senator  Kelly  as  chairman with                 
  Senators Rieger and Sharp as members.                                        
                                                                               
  Senator Kelly noted  that Sec. 2 is molded  on Congressional                 
  action that has proven effective.                                            
                                                                               
  Senator  Rieger  advised   that  he  had  serious   concerns                 
  regarding the approach proposed by the legislation.                          
                                                                               
  At this point in the  meeting, Co-chair Pearce directed that                 
  the  meeting  be  recessed  pending  the  arrival  of  draft                 
  legislation relating to the constitutional budget reserve.                   
                                                                               
                       RECESS - 9:05 a.m.                                      
                     RECONVENE - 11:05 a.m.                                    
                                                                               
                                                                               
  HB 505 APPROP: BRF TO GEN.FUND; EDUCATION AID                                
                                                                               
  Co-chair Pearce directed  that CSHB  505 (Fin)(brf  fld)(efd                 
  fld)  be   brought  on   for  discussion   and  noted   that                 
  appropriation from  the constitutional  budget reserve  fund                 
  for  education  failed  as  well   as  the  effective  date.                 
  Legislation  passed  by  the  House  thus contains  only  an                 
  appropriation  to the  constitutional budget  reserve.   Co-                 
  chair Pearce next directed attention to a draft SCS CSHB 505                 
  (Fin) (8-GH2045\M, 4/13/94, Cook/Utermohle).   She noted the                 
  title change and  advised that an accompanying  title change                 
  Resolution was prepared for introduction on the floor of the                 
  Senate.   Co-chairman Frank  MOVED for adoption  of the  "M"                 
  version work draft.   No objection  having been raised,  SCS                 
  CSHB 505 (Fin) was ADOPTED.                                                  
                                                                               
  Co-chair Frank directed attention to  the sectional analysis                 
  prepared by  Legal Services  and explained  that the  Senate                 
  Finance version of the bill:                                                 
                                                                               
  Sec. 1  - Incorporates  the Governor's  findings and  intent                 
  language.                                                                    
                                                                               
                                                                               
  Sec.  2  - Includes  a  $932,762,996 appropriation  from the                 
  general        fund  to  the  constitutional budget  reserve                 
                 fund per the judgment   in Hickel v. Halford.                 
                 That total is reduced from $945  million.                     
                                                                               
  Sec.  3  -  Includes a  $73,245,478  appropriation  from the                 
  general fund        to  the  constitutional  budget  reserve                 
                      fund per the order in Cowper v. Hickel.                  
                                                                               
  Sec. 4 - Appropriates from the general fund to the                           
            constitutional  budget  reserve fund  the interest                 
            that would have been earned on totals set forth in                 
            Secs. 2 and 3.                                                     
                                                                               
  End:      SFC-94, #60,Side 1                                                 
  Begin:    SFC-94, #60, Side 2                                                
                                                                               
  Sec. 5 - Appropriates $696,527,188 from the general fund for                 
  full           funding  of education, all normal items of K-                 
                 12support including pupil  transportation and                 
                 supplemental funding for single site schools.                 
                                                                               
                                                                               
  Sec. 6 - Appropriates $103,345,264 from  the general fund to                 
  the       Alaska debt  retirement fund  for full  funding of                 
            debt service.                                                      
                                                                               
  Sec.  7  -   Incorporates  the  original  approach   of  the                 
  Governor's bill          which   split   the   $945  million                 
                           appropriation.   Sec.  7 splits the                 
                           $932 million  appropriation into  a                 
                           $416,600,000 appropriation from the                 
                           constitutional budget reserve  fund                 
                           (the amount intended to be spent by                 
                           the legislature last session) and a                 
                           $516,162,996 appropriation from the                 
                           fund to  cover a  shortfall in  the                 
                           general fund caused  by the drop in                 
                           oil prices.                                         
                                                                               
  Sec.  8  -    Appropriates  from the  constitutional  budget                 
  reserve fund                                                                 
            the interest appropriated in Sec. 4.                               
                                                                               
  Sec. 9 -   Makes a contingent appropriation from  the budget                 
  reserve                                                                      
            fund to the general fund, if necessary, to balance                 
            the FY 94 budget  and make it whole.   That amount                 
            is estimated at $323 million at the present time.                  
                                                                               
  Sec. 10 - States that appropriations from the constitutional                 
  budget                                                                       
            reserve  are   made  under   Sec.  17(c)   of  the                 
                                                                               
                                                                               
            constitution and require a three-quarter vote.                     
                                                                               
  Sec.  11  -  Makes  appropriations  in  Secs.  2  through  4                 
  retroactive to                                                               
            July 1, 1993, the beginning of the fiscal year.                    
                                                                               
  Sec.  12  -  Makes  appropriations  in  Secs.  2  through  6                 
  contingent upon                                                              
            appropriations from the budget reserve fund (Secs.                 
            7 through 9).  That  ensures that certain sections                 
            cannot be dropped or vetoed out of the bill.                       
                                                                               
  Sec. 13 - Contains an immediate effective date.                              
                                                                               
  Senator Kerttula asked  if the proposed bill  would meet the                 
  constitutional  test.    JIM   BALDWIN,  Assistant  Attorney                 
  General, Dept. of Law, said that the legislation follows the                 
  approach  suggested  in  the  Governor's  bill:    that  the                 
  appropriations be  made in  accordance with  a three-quarter                 
  vote of both  houses of  the legislature.   That avoids  the                 
  uncertainties of litigation.  Mr.  Baldwin stressed that his                 
  comments do not  indicate discontinuance of support  for the                 
  validity of HB   58 (ADMINISTRATION OF BUDGET RESERVE  FUND)                 
  which,  if applied,  would  make a  certain  balance of  the                 
  budget reserve fund  expendable without  the necessity of  a                 
  three-quarters vote.  If the legislature passes the proposed                 
  bill  on  a  three-quarters  vote,  the  current  basis  for                 
  challenge would be avoided.                                                  
                                                                               
  Senator Kerttula asked if the bill is in good form and meets                 
  concerns raised by  the Office of  the Attorney General  and                 
  others.  Mr. Baldwin responded affirmatively, advising  that                 
  he reviewed the  bill at  the request of  Senator Frank  and                 
  found  it  to be  in correct  technical form.   It  does not                 
  present any new issues.                                                      
                                                                               
  Senator Rieger referenced the revised, higher  dollar amount                 
  set  forth  in  an  April  13,  1994, memo  and  voiced  his                 
  understanding that transfer in and  out of a greater  amount                 
  would  not change  the overall spending  plan.   Mr. Stastny                 
  concurred.                                                                   
                                                                               
  Senator Rieger next raised questions resulting from language                 
  relating to repayment of the constitutional  budget reserve.                 
  Mr.  Stastny  concurred  that  the  additional  $76  million                 
  flowing from the  general fund to the  constitutional budget                 
  reserve and  back out would  increase the amount  that would                 
  have to be repaid.                                                           
                                                                               
  Senator  Rieger   next  inquired  concerning   the  detailed                 
  judicial ruling, asking if it contained anything unexpected.                 
  Mr. Baldwin responded affirmatively.  He then explained that                 
  while the  issue of repayment  was not  argued before  Judge                 
  Reese, the court mentioned that provision  of the bill.  The                 
                                                                               
                                                                               
  Dept. of Law felt it was  noncontroversial in that it merely                 
  restated constitutional provisions.  Under those  provisions                 
  the surplus carried forward at the end of the fiscal year is                 
  the source of money to be used for the repayment obligation.                 
  The judge provided a more expansive interpretation by saying                 
  that any surplus in the general fund would be the source for                 
  repayment.    Senator  Rieger asked  if  the  permanent fund                 
  earnings reserve would be part of  the surplus.  Mr. Baldwin                 
  said that the judge interprets the earnings reserve as being                 
  on the front end--as being available in general--even though                 
  it is not in the general  fund.  Mr. Baldwin further advised                 
  that his reading of the  ruling indicates that any  separate                 
  account or any separate funds established by law within  the                 
  general fund  would have to  be counted toward  the surplus.                 
  That differs from what the Dept. of Administration, division                 
  of finance, shows as the surplus  carryforward on the annual                 
  report.  In subsequent discussion, Mr. Baldwin said that the                 
  judge  did not specifically mention AHFC or AIDEA.  Specific                 
  reference  is made  to the  railbelt intertie  fund  and the                 
  earnings reserve account.  General reference is then made to                 
  other  accounts  that the  legislature  could expend  upon a                 
  majority vote "and the only impediment to the expenditure of                 
  the funds being a lack of political will to do so."                          
                                                                               
  Mr. Baldwin voiced his  belief that in making  his decision,                 
  Judge Reese "moved  towards are position--towards the  HB 58                 
  position."  Plaintiffs  argued that all funds  accessible to                 
  the legislature should  be counted as available.  That would                 
  be  very  broad.   The  legislature  appropriates  from many                 
  funding  sources.  The  judge did  not count  revolving loan                 
  funds, trust  or custodial  receipts, federal  funds, and  a                 
  list of other funds proffered by the plaintiff.  The dispute                 
  has now  narrowed to  "some of  the reserve  funds that  are                 
  established by law and the earnings reserve account."                        
                                                                               
  Senator Rieger voiced  need to  craft additional "pieces  of                 
  the package" to provide fiscal stability for the state.                      
                                                                               
  Senator Kelly  directed  attention to  Page 6,  Sec. 6,  and                 
  noted the $103  million appropriation from the  general fund                 
  to  the  Alaska debt  retirement  fund.   He  then  noted an                 
  upcoming   election  in   Anchorage  and   raised  questions                 
  concerning whether  the foregoing  appropriation would  fund                 
  the state obligation  to municipalities for 70%  school debt                 
  reimbursement.  Will  all municipal debt incurred  under the                 
  new  program would  be funded?   Co-chair  Frank  voiced his                 
  understanding that it would.  Mr. Stastny said that the bill                 
  would   provide  full  funding  of  "everything  that  we're                 
  obligated to at this point."                                                 
                                                                               
  Co-chair Frank MOVED for  passage of SCS CSHB 505  (Fin) and                 
  requested  unanimous  consent.   No  objection  having  been                 
  raised, SCS  CSHB 505 (Fin)  was REPORTED OUT  of committee.                 
  All members  signed the  committee report with  a "do  pass"                 
                                                                               
                                                                               
  recommendation  with  the  exception of  Senator  Rieger who                 
  signed "Do not pass  except as part of a  more comprehensive                 
  package."    Co-chair  Pearce  advised  that  the  necessary                 
  resolution relating to the title  change would accompany the                 
  bill.                                                                        
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting was adjourned at approximately 11:25 a.m.                        
                                                                               

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