HOUSE FINANCE COMMITTEE March 24, 1993 8:30 a.m. TAPE HFC 93 - 56, Side 1, #000 - end. TAPE HFC 93 - 56, Side 2, #000 - #481. CALL TO ORDER Co-Chair Ron Larson called the meeting of the House Finance Committee to order at 8:30 A.M. PRESENT Co-Chair Larson Representative Therriault Co-Chair MacLean Representative Foster Vice-Chair Hanley Representative Grussendorf Representative Hoffman Representative Martin Representative Navarre Representative Parnell Representative Brown was not present for the meeting. ALSO PRESENT Deborah Wing, Director, Family and Youth Services, Department of Health and Social Services; John Peterson, Aid to Representative Gail Phillips; Gary Bader, Director, Administrative Services, Department of Education; Bruce Garrett, Kodiak, Alaska; Laura Fleming, Aid to Representative Bill Williams; Kate Tesar, Association of Independent Tour Operators, Juneau, Alaska; Irene Morris, Alaska Environmental Lobby, Juneau, Alaska; Romaine Careen, People Safety Coordinator, Department of Education; Geron Bruce, Special Assistant, Department of Fish and Game. SUMMARY INFORMATION HB 2 An Act requiring drug and alcohol tests for school bus drivers. CS HB 2 (FIN) was reported out of Committee with "no recommendation" with a Letter of Intent by the House Judiciary Committee and with a new fiscal note by the Department of Education. HB 97 An Act clarifying the responsibilities of the Department of Health and Social Services and parents for children who are committed to the custody of the department and are placed by the department with the parents; and providing for an 1 effective date. HB 97 was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Health and Social Services. HB 172 An Act relating to the wildlife conservation tag and to entry onto state game and wildlife sanctuaries, state game refuges, state range areas, and fish and game critical habitat areas; and providing for an effective date. HB 172 was held in Committee for further discussion. HOUSE BILL 97 "An Act clarifying the responsibilities of the Department of Health and Social Services and parents for children who are committed to the custody of the department and are placed by the department with the parents; and providing for an effective date." DEBORAH WING, DIRECTOR, FAMILY AND YOUTH SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, stated that the Department of Health and Social Services strongly supports HB 97, which clarifies the responsibilities of the Department for children committed to its legal custody and who continue to reside with the parent or parents. The bill amends AS 47.10.084 to require a parent or parents to provide for the day to day care of their children if these children are residing with them when the State has legal custody as a result of child protection services. Representative Parnell inquired if medical care would include the cost of counseling. Ms. Winger stated it would. Representative Martin discussed medical care costs of foster children. Ms. Wing noted that children in foster care would continue to remain a responsibility of the State. Representative Parnell inquired if parents would be asked to pay for counseling services of abused children. Ms. Wing noted, that if the child is qualified under Medicaid, the parents are able to utilize that resource. Representative Martin MOVED to report HB 97 out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. HB 97 was reported out of Committee with a "do pass" 2 recommendation and with a zero fiscal note by the Department of Health and Social Services. HOUSE BILL 2 "An Act requiring drug and alcohol tests for school bus drivers." JOHN PETERSON, AID TO REPRESENTATIVE GAIL PHILLIPS, noted that current Alaska law makes no provision for the routine testing of school bus drivers for drug and alcohol use. This bill would provide for such testing. The federal government is in the process of preparing regulations that will mandate testing for those who are required to have commercial drivers licenses for the operation of school buses. HB 2 is needed at this time as the effective date of the federal regulations is uncertain. The federal regulations will not apply to school buses with fewer that fifteen passengers, which does not require a commercial license for operation. Representative Grussendorf requested testimony from the Department of Law regarding the legal definition of "improper" use of drugs and alcohol. Representative Parnell questioned the constitutionality of mandating random testing. Mr. Peterson pointed out previous concerns regarding privacy was addressed in the House Judiciary Committee Letter of Intent. Representative Foster asked how the legislation's cost would be handled for the small village areas. GARY BADER, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF EDUCATION, responded that the cost is determined by a statewide average. Most of the services would be contracted out. He added that the testing is legitimate for the safety of students. ROMAINE CAREEN, PEOPLE SAFETY TRANSFORATION COORDINATOR, DEPARTMENT OF EDUCATION, noted there is a company in Anchorage which performs most of the state's testing, and added that drug testing is required by the federal government. Representative Parnell questioned if the federal regulations mandated the proposed testing. Representative Hoffman recommended that the legislation clarify the coverage of costs for this testing. BRUCE GARRETT, KODIAK SCHOOL DISTRICT, KODIAK, ALASKA, stated that under federal law, the school district must be a "drug-free" work place. He voiced his concern with who would have the burden of paying the costs for testing. Mr. Garrett noted that testing would show any drugs or alcohol 3 in the persons system taken within a 72-hour period. Representative Hoffman felt that the testing would be a violation of the privacy act. Discussion followed regarding an employee who consumes on their "off" hours. Representative Parnell pointed out that the "drug free" zone was created by federal law. Co-Chair MacLean MOVED to report HB 2 out of Committee with individual recommendations and the new Department of Education fiscal note. Representative Parnell OBJECTED in order to make an amendment. He MOVED deleting the word "improper" from Page 1, Line 7 and Line 8. (Tape Change, HFC 93-56, Side 2). Representative Hanley recommended adding "illegal" on Page 1, Line 8 and deleting the word "improper". Representative Parnell WITHDREW his motion to delete "improper" and MOVED to delete the word "improper" on Line 7 and on Line 8 delete "improper" and replace with "illegal". There being NO OBJECTION, it was so ordered. Representative Hoffman offered a technical amendment which would explain that the Department of Education would be responsible for payments of all testing. Mr. Bader pointed out that it was the intent of the Department to pay for the testing. Representative Hoffman asked for approval of the conceptual amendment which would legally clarify that information. Representative Martin noted that the fiscal note states that the money is allocated to the Department of Education for specifically paying for testing. Representative Hoffman objected and asked that detailed clarification be contained in the bill. Representative Foster OBJECTED to moving the bill from Committee. A roll call was taken on the MOTION. IN FAVOR: Hanley, Martin, Parnell, Therriault, MacLean, Larson. OPPOSED: Hoffman, Navarre, Foster. Representative Brown and Representative Grussendorf were not present for the vote. The MOTION PASSED, (6 - 3). CS HB 2 (FIN) was reported out of Committee with "no recommendation" and with a House Judiciary Committee Letter of Intent and a fiscal note by the Department of Education. 4 HOUSE BILL 172 "An Act relating to the wildlife conservation tag and to entry onto state game and wildlife sanctuaries, state game refuges, state range areas, and fish and game critical habitat areas; and providing for an effective date." LAURA FLEMING, AID FOR REPRESENTATIVE BILL WILLIAMS, stated that HB 172 would create a wildlife conservation tag program aimed at encouraging non-consumptive users of Alaska's wildlife to help pay for wildlife programs and facilities they use. Wildlife viewing is a fast-growing form of recreation in the world, and a major factor in attracting visitors to Alaska. Careful management and development of viewing areas is important to protect the wildlife while enhancing visitor opportunities. The bill is a "user pays" approach to generating funds to support this growing area of wildlife use. The primary thrust of HB 172 is a voluntary program. Participants would pay a fairly small price for the tag. The price of the tag is left to the Department but will be kept low since the goal is to sell large numbers of the tags to those who voluntarily purchase them. Ms. Fleming explained the amendments submitted by Representative Williams which will make three small technical changes to CS HB 172 (RES) version. Co-Chair MacLean presented her concerns with the legislation and the limitations created in the McNeil River area which she felt would restrict individual freedom to explore certain parts of that area. GERON BRUCE, SPECIAL ASSISTANT, DEPARTMENT OF FISH AND GAME, noted the legislation would not restrict people from going into areas to pursue exempted activities. He added that McNeil is a small area sanctuary which is exclusively a brown bear viewing area. This area can be used by permit only and is already existing in law. The function of the permit system is to protect the intrinsic quality of the environment for the animals of those areas and for those who come to view the animals. Co-Chair MacLean voiced her concern with the potential expansion of areas added to the conservation tag entry system. Mr. Bruce advised that the Department will be working closely with tourism, the visitor industry and the 5 public. KATE TESAR, ASSOCIATION OF INDEPENDENT TOUR OPERATORS, JUNEAU, ALASKA, noted support of the legislation. She stated that her group has been assured by the Department of Fish and Game that the tourism industry will be included in changes in the current regulations. There will be no arbitrary designation of tagged areas without good reason. She spoke of the profit which could be generated from the pins. IRENE MORRIS, ALASKA ENVIRONMENTAL LOBBY (AEL), JUNEAU, ALASKA, spoke in support of HB 172. She recommended that non consumptive users pay a portion of the management costs for specified areas. Representative Foster interjected his many concerns with the proposed legislation. He felt HB 172 would be detrimental to Western and Arctic Alaska. Mr. Bruce noted that the Department would be willing to substitute language which would help clarify the legislation. The legislation is not directed at establishing additional fees for subsistence users, but rather allowing users to contribute to programs. Representative Hanley recommended limiting the law to the two designated areas. If additional areas should be added, then the Legislature would determine if they would be advantageous. Co-Chair Larson advised that the legislation should be returned to Subcommittee for further considerations. The bill was HELD in Committee. ADJOURNMENT The meeting adjourned at 9:45 a.m. HOUSE FINANCE COMMITTEE MARCH 27, 1993 10:00 A.M. TAPE HFC 93 - 70, Side 1, #000 - end. TAPE HFC 93 - 70, Side 2, #000 - end. TAPE HFC 93 - 71, Side 1, #000 - #123. CALL TO ORDER Co-Chair Ron Larson called the meeting of the House Finance Committee to order at 10:00 A.M. PRESENT 6 Co-Chair Larson Representative Brown Co-Chair MacLean Representative Foster Vice-Chair Hanley Representative Grussendorf Representative Hoffman Representative Martin Representative Navarre Representative Parnell Representative Therriault ALSO PRESENT Representative Gail Phillips; Representative Jim Nordlund; Representative Tom Brice; Ron Garzini, Executive Director, Alaska Energy Authority (AEA, Department of Commerce and Economic Development; Glona Manni, Director, Accounting and Administration, Alaska Energy Authority, Department of Commerce and Economic Development; Jan Hansen, Director, Division of Public Assistance, Department of Health and Social Services. SUMMARY INFORMATION HB 67 An Act relating to eligibility for and payments of public assistance; and providing for an effective date. CS HB 67 (FIN) was reported out of Committee with "individual recommendations" and with fiscal notes by the Department of Health and Social Services, three from AFDC Division, three from the APA Division, and three from PFD Hold Harmless and the Medicaid Non-Facilities. HB 126 An Act relating to payment of prevailing wage rates on public construction projects. HB 126 was reported out of Committee with a "do pass" recommendation and with two zero fiscal notes by the Department of Transportation and Public Facilities dated 3/12/93 and the Department of Labor dated 3/12/93. HB 216 An Act relating to power cost equalization; and providing for an effective date. HB 216 was held in Committee for further discussion. HOUSE BILL 126 An Act relating to payment of prevailing wage rates on public construction projects. 7 REPRESENTATIVE GAIL PHILLIPS said current law provides that a construction contractor or subcontractor who performs work on public construction in the State shall pay not less than the current prevailing wage for work of a similar nature. However, an increase in the prevailing wage in the middle of a contract creates a financial hardship on the contractor; and anticipation of interim increases may also serve to inflate the cost of construction projects because the contractor or subcontractor must absorb the costs of any wage rate change. The prevailing rate of wages is determined by the Department of Labor based on a periodic survey of public and private commercial heavy and highway construction projects in the State. If the union rate is prevailed from the survey results, interim wage and benefit increases are currently prevailed. Representative Phillips stated that HB 126 was introduced to amend AS 36.05.010 so that the prevailing wage as determined by the Department of Labor will no longer apply immediately to contracts in progress. The wage in effect at least ten days before final bid submission will remain in effect for 24 months from the date the contract is awarded. Wages will remain the same for the life of most construction projects. In the case of contracts that are longer than 24 months, the bill provides for stable wages for a subsequent 24 month period, and so forth for the life of the contract. Representative Parnell MOVED to report SS HB 126 out of Committee with individual recommendations and with the accompanying two zero fiscal notes. There being NO OBJECTION, it was so ordered. SS HB 126 was reported out of Committee with a "do pass" recommendation and with zero fiscal notes by the Department of Transportation and Public Facilities dated 3/12/93 and the Department of Labor dated 3/12/93 HOUSE BILL 67 "An Act relating to eligibility for and payments of public assistance; and providing for an effective date." JAN HANSEN, DIRECTOR, PUBLIC ASSISTANCE, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, explained that HB 67 (HESS) would amend the Governor's welfare reduction bill by permanently repealing the authority to automatically award cost-of-living allowances (COLA's) in benefits paid under the Aid to Families with Dependent Children (AFDC) and Adult Public Assistance (APA) programs. The Governor's bill 8 proposed a one-year suspension of the COLA's and would have denied the three percent COLA's expected to be awarded in January 1994 while retaining the authority to award COLA's in future years. She added, the Governor's bill has the dual goals of producing immediate savings in program costs and curbing the rate of increase in the welfare caseload. Suspending rather than repealing the COLA's was a strategy calculated to achieve the necessary savings in program costs while maintaining the protection against rising living costs afforded by the statutory COLA provision. CS HB 67 (HESS) removes the protection. The benefit reductions imposed by the Governor's bill are substantial. The Department of Health and Social Services does not support the assistance reductions which would result from the permanent repeal of the AFDC and APA COLA's. Representative Hoffman noted that the cost-of-living and the earning power in Alaska is higher than all the other states. His comments preceded a discussion regarding the high ratio of payments distributed to Alaskans on public assistance and welfare. Ms. Hansen stated that the poverty level in Alaska is twenty-five percent higher than the federally established poverty level guideline. Representative Brown MOVED Amendments #1 - #4 [Attachment #1 - #4]. She proceeded to withdraw Amendment #3 and #4. She added Amendments #1 and #2 would restore the proposed legislation to the Governor's recommended level of funding. The Amendment [Attachment #2] would not change the reduction level and would continue to have the three year roll-back for the Adult Public Assistance and a two year roll-back for AFDC. Co-Chair Larson asked how many states currently have a COLA. Ms. Hansen stated that Alaska was the only state with an automatic COLA. Representative Parnell OBJECTED to Amendment #1. A roll call was taken on the MOTION. IN FAVOR: Foster, Grussendorf, Hoffman, Brown, MacLean, Navarre. OPPOSED: Therriault, Hanley, Martin, Parnell, Larson. The MOTION PASSED, ( 6 - 5). Representative Brown MOVED Amendment #2 [Attachment #3]. She explained that the amendment would make a less severe reduction to the level of the FY 92 roll-back. Representative Hoffman indicated his support of the 9 amendment explaining that energy, food and rent costs in Alaska are more expensive. Representative Martin OBJECTED. A roll call was taken on the MOTION. IN FAVOR: Brown, Foster, Grussendorf, Hoffman, MacLean, Navarre. OPPOSED: Therriault, Hanley, Martin, Parnell, Larson. The MOTION PASSED, (6 - 5). (Tape Change, HFC 93-70, Side 2). Representative Navarre MOVED to report CS HB 67 (FIN) out of Committee with individual recommendations and the accompanying fiscal notes. Representative Hoffman OBJECTED. A roll call was taken on the MOTION. IN FAVOR: Foster, Grussendorf, Hanley, Martin, Navarre, Parnell, Therriault, MacLean. OPPOSED: Larson, Brown, Hoffman. The MOTION PASSED (8 - 3). CS HB 67 (FIN) was reported out of Committee with "individual recommendations" and with fiscal notes by the Department of Health and Social Services, three from AFDC Division, three from the APA Division, PFD Hold Harmless and the Medicaid Non-Facilities. HOUSE BILL 216 "An Act relating to power cost equalization; and providing for an effective date." Co-Chair Larson noted that HB 216 was sponsored by the House Finance Committee. The legislation would affect Power Cost Equalization, a formula program reducing the consumers cost of electricity generated and sold by eligible utilities in rural Alaska. RAY GARZINI, EXECUTIVE DIRECTOR, ALASKA ENERGY AUTHORITY, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, stated that the Alaska Energy Authority (AEA) does support the approach taken in HB 216. He referenced SB 124 and explained the differences between the two pieces of legislation. Mr. Garzini advised that the cost savings due to the removal of state and federal facilities from the program would be $1 10 million dollars. The schools continued cost for participation in the program would be about $570 thousand dollars. Based on the FY 91 PCE program statistics report issued in December, 1992, the average monthly consumption of residential and commercial customers eligible for PCE is 374 kwh per month. Community facilities are excluded from the computation. Co-Chair MacLean felt that APUC should decide the kilowatt hour average, not AEA. She stated her concern with the cost of the fiscal note. She pointed out historically fiscal concerns have been funded at eighty percent. Mr. Garzini stated that the legislation could accommodate the budget level. Discussion followed regarding the funding request level in the proposed legislation. Mr. Garzini stated last year because of the funding cut, AEA and PCE had a difficult time determining the cost allocations. A program did not exist from which to allocate the reductions. Consequently, attention was focused on the residential customers and reductions to the benefit of the commercial customers users. Co-Chair Larson understood that PCE's function was to balance the electrical cost to consumers between the urban and the rural consumption. His concern was the system used in determining the 750 kilowatt hour average usage cost in Anchorage, Fairbanks and Juneau. Mr. Garzini responded, the average monthly residential consumption residential kilowatt use was 367 kwh/hrs. Co-Chair Larson thought that it was placed artificially high to encourage consumption. Mr. Garzini noted the 750 kwh/hrs per month originated in the urban areas. Representative Parnell questioned if cost savings could come from accepting federal facilities to the program. Mr. Garzini replied they currently include federal and state facilities and schools, amounting to $1 million dollars. Co-Chair MacLean offered a "friendly amendment" to Page 2, Line 9, deleting the language "rate of change in fuel cost and power demand" and inserting "average cost of kilowatt hour in Anchorage, Juneau and Fairbanks". She pointed out that APUC should be the authority addressing the legislation. Mr. Garzini agreed that APUC should have the final say on such matters, since APUC is a reviewing agency. He recommended that AEA prepare the rates and then APUC review it. 11 Representative Brown noted for the record that her husband is one of the APUC Commissioners. She pointed out that APUC reviews regulated utilities which have a monopoly, to assure that the monopolies are not over charging people for services and costs. Mr. Garzini elaborated, there are currently one hundred thirty utilities which are not regulated. He reiterated that the operational and administrative procedures of the program should be handled by AEA. (Tape Change, HFC 93-71, Side 1). Representative Brown asked the average cost per kilowatt hour for residential and commercial uses in Juneau, Anchorage and Fairbanks. She pointed out that the comparisons are currently based on non-compatible information. HB 216 was HELD in Committee for further discussion. ADJOURNMENT The meeting adjourned at 11:55 a.m. HOUSE FINANCE COMMITTEE March 24, 1993 8:30 a.m. TAPE HFC 93 - 56, Side 1, #000 - end. TAPE HFC 93 - 56, Side 2, #000 - #481. CALL TO ORDER Co-Chair Ron Larson called the meeting of the House Finance Committee to order at 8:30 A.M. PRESENT Co-Chair Larson Representative Therriault Co-Chair MacLean Representative Foster Vice-Chair Hanley Representative Grussendorf Representative Hoffman Representative Martin Representative Navarre Representative Parnell Representative Brown was not present for the meeting. ALSO PRESENT Deborah Wing, Director, Family and Youth Services, Department of Health and Social Services; John Peterson, Aid to Representative Gail Phillips; Gary Bader, Director, Administrative Services, Department of Education; Bruce 12 Garrett, Kodiak, Alaska; Laura Fleming, Aid to Representative Bill Williams; Kate Tesar, Association of Independent Tour Operators, Juneau, Alaska; Irene Morris, Alaska Environmental Lobby, Juneau, Alaska; Romaine Careen, People Safety Coordinator, Department of Education; Geron Bruce, Special Assistant, Department of Fish and Game. SUMMARY INFORMATION HB 2 An Act requiring drug and alcohol tests for school bus drivers. CS HB 2 (FIN) was reported out of Committee with "no recommendation" with a Letter of Intent by the House Judiciary Committee and with a new fiscal note by the Department of Education. HB 97 An Act clarifying the responsibilities of the Department of Health and Social Services and parents for children who are committed to the custody of the department and are placed by the department with the parents; and providing for an effective date. HB 97 was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Health and Social Services. HB 172 An Act relating to the wildlife conservation tag and to entry onto state game and wildlife sanctuaries, state game refuges, state range areas, and fish and game critical habitat areas; and providing for an effective date. HB 172 was held in Committee for further discussion. HOUSE BILL 97 "An Act clarifying the responsibilities of the Department of Health and Social Services and parents for children who are committed to the custody of the department and are placed by the department with the parents; and providing for an effective date." DEBORAH WING, DIRECTOR, FAMILY AND YOUTH SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, stated that the Department of Health and Social Services strongly supports HB 97, which clarifies the responsibilities of the Department for children committed to its legal custody and who continue to reside with the parent or parents. The bill amends AS 47.10.084 to require a parent or parents to 13 provide for the day to day care of their children if these children are residing with them when the State has legal custody as a result of child protection services. Representative Parnell inquired if medical care would include the cost of counseling. Ms. Winger stated it would. Representative Martin discussed medical care costs of foster children. Ms. Wing noted that children in foster care would continue to remain a responsibility of the State. Representative Parnell inquired if parents would be asked to pay for counseling services of abused children. Ms. Wing noted, that if the child is qualified under Medicaid, the parents are able to utilize that resource. Representative Martin MOVED to report HB 97 out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. HB 97 was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Health and Social Services. HOUSE BILL 2 "An Act requiring drug and alcohol tests for school bus drivers." JOHN PETERSON, AID TO REPRESENTATIVE GAIL PHILLIPS, noted that current Alaska law makes no provision for the routine testing of school bus drivers for drug and alcohol use. This bill would provide for such testing. The federal government is in the process of preparing regulations that will mandate testing for those who are required to have commercial drivers licenses for the operation of school buses. HB 2 is needed at this time as the effective date of the federal regulations is uncertain. The federal regulations will not apply to school buses with fewer that fifteen passengers, which does not require a commercial license for operation. Representative Grussendorf requested testimony from the Department of Law regarding the legal definition of "improper" use of drugs and alcohol. Representative Parnell questioned the constitutionality of mandating random testing. Mr. Peterson pointed out previous concerns regarding privacy was addressed in the House Judiciary Committee Letter of Intent. Representative Foster asked how the legislation's cost would 14 be handled for the small village areas. GARY BADER, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF EDUCATION, responded that the cost is determined by a statewide average. Most of the services would be contracted out. He added that the testing is legitimate for the safety of students. ROMAINE CAREEN, PEOPLE SAFETY TRANSFORATION COORDINATOR, DEPARTMENT OF EDUCATION, noted there is a company in Anchorage which performs most of the state's testing, and added that drug testing is required by the federal government. Representative Parnell questioned if the federal regulations mandated the proposed testing. Representative Hoffman recommended that the legislation clarify the coverage of costs for this testing. BRUCE GARRETT, KODIAK SCHOOL DISTRICT, KODIAK, ALASKA, stated that under federal law, the school district must be a "drug-free" work place. He voiced his concern with who would have the burden of paying the costs for testing. Mr. Garrett noted that testing would show any drugs or alcohol in the persons system taken within a 72-hour period. Representative Hoffman felt that the testing would be a violation of the privacy act. Discussion followed regarding an employee who consumes on their "off" hours. Representative Parnell pointed out that the "drug free" zone was created by federal law. Co-Chair MacLean MOVED to report HB 2 out of Committee with individual recommendations and the new Department of Education fiscal note. Representative Parnell OBJECTED in order to make an amendment. He MOVED deleting the word "improper" from Page 1, Line 7 and Line 8. (Tape Change, HFC 93-56, Side 2). Representative Hanley recommended adding "illegal" on Page 1, Line 8 and deleting the word "improper". Representative Parnell WITHDREW his motion to delete "improper" and MOVED to delete the word "improper" on Line 7 and on Line 8 delete "improper" and replace with "illegal". There being NO OBJECTION, it was so ordered. Representative Hoffman offered a technical amendment which would explain that the Department of Education would be responsible for payments of all testing. Mr. Bader pointed out that it was the intent of the Department to pay for the testing. Representative Hoffman asked for approval of the conceptual amendment which would legally clarify that information. Representative Martin noted that the fiscal 15 note states that the money is allocated to the Department of Education for specifically paying for testing. Representative Hoffman objected and asked that detailed clarification be contained in the bill. Representative Foster OBJECTED to moving the bill from Committee. A roll call was taken on the MOTION. IN FAVOR: Hanley, Martin, Parnell, Therriault, MacLean, Larson. OPPOSED: Hoffman, Navarre, Foster. Representative Brown and Representative Grussendorf were not present for the vote. The MOTION PASSED, (6 - 3). CS HB 2 (FIN) was reported out of Committee with "no recommendation" and with a House Judiciary Committee Letter of Intent and a fiscal note by the Department of Education. HOUSE BILL 172 "An Act relating to the wildlife conservation tag and to entry onto state game and wildlife sanctuaries, state game refuges, state range areas, and fish and game critical habitat areas; and providing for an effective date." LAURA FLEMING, AID FOR REPRESENTATIVE BILL WILLIAMS, stated that HB 172 would create a wildlife conservation tag program aimed at encouraging non-consumptive users of Alaska's wildlife to help pay for wildlife programs and facilities they use. Wildlife viewing is a fast-growing form of recreation in the world, and a major factor in attracting visitors to Alaska. Careful management and development of viewing areas is important to protect the wildlife while enhancing visitor opportunities. The bill is a "user pays" approach to generating funds to support this growing area of wildlife use. The primary thrust of HB 172 is a voluntary program. Participants would pay a fairly small price for the tag. The price of the tag is left to the Department but will be kept low since the goal is to sell large numbers of the tags to those who voluntarily purchase them. Ms. Fleming explained the amendments submitted by 16 Representative Williams which will make three small technical changes to CS HB 172 (RES) version. Co-Chair MacLean presented her concerns with the legislation and the limitations created in the McNeil River area which she felt would restrict individual freedom to explore certain parts of that area. GERON BRUCE, SPECIAL ASSISTANT, DEPARTMENT OF FISH AND GAME, noted the legislation would not restrict people from going into areas to pursue exempted activities. He added that McNeil is a small area sanctuary which is exclusively a brown bear viewing area. This area can be used by permit only and is already existing in law. The function of the permit system is to protect the intrinsic quality of the environment for the animals of those areas and for those who come to view the animals. Co-Chair MacLean voiced her concern with the potential expansion of areas added to the conservation tag entry system. Mr. Bruce advised that the Department will be working closely with tourism, the visitor industry and the public. KATE TESAR, ASSOCIATION OF INDEPENDENT TOUR OPERATORS, JUNEAU, ALASKA, noted support of the legislation. She stated that her group has been assured by the Department of Fish and Game that the tourism industry will be included in changes in the current regulations. There will be no arbitrary designation of tagged areas without good reason. She spoke of the profit which could be generated from the pins. IRENE MORRIS, ALASKA ENVIRONMENTAL LOBBY (AEL), JUNEAU, ALASKA, spoke in support of HB 172. She recommended that non consumptive users pay a portion of the management costs for specified areas. Representative Foster interjected his many concerns with the proposed legislation. He felt HB 172 would be detrimental to Western and Arctic Alaska. Mr. Bruce noted that the Department would be willing to substitute language which would help clarify the legislation. The legislation is not directed at establishing additional fees for subsistence users, but rather allowing users to contribute to programs. Representative Hanley recommended limiting the law to the two designated areas. If additional areas should be added, then the Legislature would determine if they would be advantageous. 17 Co-Chair Larson advised that the legislation should be returned to Subcommittee for further considerations. The bill was HELD in Committee. ADJOURNMENT The meeting adjourned at 9:45 a.m. HOUSE FINANCE COMMITTEE MARCH 27, 1993 10:00 A.M. TAPE HFC 93 - 70, Side 1, #000 - end. TAPE HFC 93 - 70, Side 2, #000 - end. TAPE HFC 93 - 71, Side 1, #000 - #123. CALL TO ORDER Co-Chair Ron Larson called the meeting of the House Finance Committee to order at 10:00 A.M. PRESENT Co-Chair Larson Representative Brown Co-Chair MacLean Representative Foster Vice-Chair Hanley Representative Grussendorf Representative Hoffman Representative Martin Representative Navarre Representative Parnell Representative Therriault ALSO PRESENT Representative Gail Phillips; Representative Jim Nordlund; Representative Tom Brice; Ron Garzini, Executive Director, Alaska Energy Authority (AEA, Department of Commerce and Economic Development; Glona Manni, Director, Accounting and Administration, Alaska Energy Authority, Department of Commerce and Economic Development; Jan Hansen, Director, Division of Public Assistance, Department of Health and Social Services. SUMMARY INFORMATION HB 67 An Act relating to eligibility for and payments of public assistance; and providing for an effective date. CS HB 67 (FIN) was reported out of Committee with "individual recommendations" and with fiscal notes by the Department of Health and Social Services, three from AFDC Division, three from the APA Division, and three from PFD Hold Harmless and the 18 Medicaid Non-Facilities. HB 126 An Act relating to payment of prevailing wage rates on public construction projects. HB 126 was reported out of Committee with a "do pass" recommendation and with two zero fiscal notes by the Department of Transportation and Public Facilities dated 3/12/93 and the Department of Labor dated 3/12/93. HB 216 An Act relating to power cost equalization; and providing for an effective date. HB 216 was held in Committee for further discussion. HOUSE BILL 126 An Act relating to payment of prevailing wage rates on public construction projects. REPRESENTATIVE GAIL PHILLIPS said current law provides that a construction contractor or subcontractor who performs work on public construction in the State shall pay not less than the current prevailing wage for work of a similar nature. However, an increase in the prevailing wage in the middle of a contract creates a financial hardship on the contractor; and anticipation of interim increases may also serve to inflate the cost of construction projects because the contractor or subcontractor must absorb the costs of any wage rate change. The prevailing rate of wages is determined by the Department of Labor based on a periodic survey of public and private commercial heavy and highway construction projects in the State. If the union rate is prevailed from the survey results, interim wage and benefit increases are currently prevailed. Representative Phillips stated that HB 126 was introduced to amend AS 36.05.010 so that the prevailing wage as determined by the Department of Labor will no longer apply immediately to contracts in progress. The wage in effect at least ten days before final bid submission will remain in effect for 24 months from the date the contract is awarded. Wages will remain the same for the life of most construction projects. In the case of contracts that are longer than 24 months, the bill provides for stable wages for a subsequent 24 month period, and so forth for the life of the contract. Representative Parnell MOVED to report SS HB 126 out of 19 Committee with individual recommendations and with the accompanying two zero fiscal notes. There being NO OBJECTION, it was so ordered. SS HB 126 was reported out of Committee with a "do pass" recommendation and with zero fiscal notes by the Department of Transportation and Public Facilities dated 3/12/93 and the Department of Labor dated 3/12/93 HOUSE BILL 67 "An Act relating to eligibility for and payments of public assistance; and providing for an effective date." JAN HANSEN, DIRECTOR, PUBLIC ASSISTANCE, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, explained that HB 67 (HESS) would amend the Governor's welfare reduction bill by permanently repealing the authority to automatically award cost-of-living allowances (COLA's) in benefits paid under the Aid to Families with Dependent Children (AFDC) and Adult Public Assistance (APA) programs. The Governor's bill proposed a one-year suspension of the COLA's and would have denied the three percent COLA's expected to be awarded in January 1994 while retaining the authority to award COLA's in future years. She added, the Governor's bill has the dual goals of producing immediate savings in program costs and curbing the rate of increase in the welfare caseload. Suspending rather than repealing the COLA's was a strategy calculated to achieve the necessary savings in program costs while maintaining the protection against rising living costs afforded by the statutory COLA provision. CS HB 67 (HESS) removes the protection. The benefit reductions imposed by the Governor's bill are substantial. The Department of Health and Social Services does not support the assistance reductions which would result from the permanent repeal of the AFDC and APA COLA's. Representative Hoffman noted that the cost-of-living and the earning power in Alaska is higher than all the other states. His comments preceded a discussion regarding the high ratio of payments distributed to Alaskans on public assistance and welfare. Ms. Hansen stated that the poverty level in Alaska is twenty-five percent higher than the federally established poverty level guideline. Representative Brown MOVED Amendments #1 - #4 [Attachment #1 - #4]. She proceeded to withdraw Amendment #3 and #4. She added Amendments #1 and #2 would restore the proposed legislation to the Governor's recommended level of funding. 20 The Amendment [Attachment #2] would not change the reduction level and would continue to have the three year roll-back for the Adult Public Assistance and a two year roll-back for AFDC. Co-Chair Larson asked how many states currently have a COLA. Ms. Hansen stated that Alaska was the only state with an automatic COLA. Representative Parnell OBJECTED to Amendment #1. A roll call was taken on the MOTION. IN FAVOR: Foster, Grussendorf, Hoffman, Brown, MacLean, Navarre. OPPOSED: Therriault, Hanley, Martin, Parnell, Larson. The MOTION PASSED, ( 6 - 5). Representative Brown MOVED Amendment #2 [Attachment #3]. She explained that the amendment would make a less severe reduction to the level of the FY 92 roll-back. Representative Hoffman indicated his support of the amendment explaining that energy, food and rent costs in Alaska are more expensive. Representative Martin OBJECTED. A roll call was taken on the MOTION. IN FAVOR: Brown, Foster, Grussendorf, Hoffman, MacLean, Navarre. OPPOSED: Therriault, Hanley, Martin, Parnell, Larson. The MOTION PASSED, (6 - 5). (Tape Change, HFC 93-70, Side 2). Representative Navarre MOVED to report CS HB 67 (FIN) out of Committee with individual recommendations and the accompanying fiscal notes. Representative Hoffman OBJECTED. A roll call was taken on the MOTION. IN FAVOR: Foster, Grussendorf, Hanley, Martin, Navarre, Parnell, Therriault, MacLean. OPPOSED: Larson, Brown, Hoffman. The MOTION PASSED (8 - 3). CS HB 67 (FIN) was reported out of Committee with "individual recommendations" and with fiscal notes by the 21 Department of Health and Social Services, three from AFDC Division, three from the APA Division, PFD Hold Harmless and the Medicaid Non-Facilities. HOUSE BILL 216 "An Act relating to power cost equalization; and providing for an effective date." Co-Chair Larson noted that HB 216 was sponsored by the House Finance Committee. The legislation would affect Power Cost Equalization, a formula program reducing the consumers cost of electricity generated and sold by eligible utilities in rural Alaska. RAY GARZINI, EXECUTIVE DIRECTOR, ALASKA ENERGY AUTHORITY, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, stated that the Alaska Energy Authority (AEA) does support the approach taken in HB 216. He referenced SB 124 and explained the differences between the two pieces of legislation. Mr. Garzini advised that the cost savings due to the removal of state and federal facilities from the program would be $1 million dollars. The schools continued cost for participation in the program would be about $570 thousand dollars. Based on the FY 91 PCE program statistics report issued in December, 1992, the average monthly consumption of residential and commercial customers eligible for PCE is 374 kwh per month. Community facilities are excluded from the computation. Co-Chair MacLean felt that APUC should decide the kilowatt hour average, not AEA. She stated her concern with the cost of the fiscal note. She pointed out historically fiscal concerns have been funded at eighty percent. Mr. Garzini stated that the legislation could accommodate the budget level. Discussion followed regarding the funding request level in the proposed legislation. Mr. Garzini stated last year because of the funding cut, AEA and PCE had a difficult time determining the cost allocations. A program did not exist from which to allocate the reductions. Consequently, attention was focused on the residential customers and reductions to the benefit of the commercial customers users. Co-Chair Larson understood that PCE's function was to balance the electrical cost to consumers between the urban and the rural consumption. His concern was the system used in determining the 750 kilowatt hour average usage cost in 22 Anchorage, Fairbanks and Juneau. Mr. Garzini responded, the average monthly residential consumption residential kilowatt use was 367 kwh/hrs. Co-Chair Larson thought that it was placed artificially high to encourage consumption. Mr. Garzini noted the 750 kwh/hrs per month originated in the urban areas. Representative Parnell questioned if cost savings could come from accepting federal facilities to the program. Mr. Garzini replied they currently include federal and state facilities and schools, amounting to $1 million dollars. Co-Chair MacLean offered a "friendly amendment" to Page 2, Line 9, deleting the language "rate of change in fuel cost and power demand" and inserting "average cost of kilowatt hour in Anchorage, Juneau and Fairbanks". She pointed out that APUC should be the authority addressing the legislation. Mr. Garzini agreed that APUC should have the final say on such matters, since APUC is a reviewing agency. He recommended that AEA prepare the rates and then APUC review it. Representative Brown noted for the record that her husband is one of the APUC Commissioners. She pointed out that APUC reviews regulated utilities which have a monopoly, to assure that the monopolies are not over charging people for services and costs. Mr. Garzini elaborated, there are currently one hundred thirty utilities which are not regulated. He reiterated that the operational and administrative procedures of the program should be handled by AEA. (Tape Change, HFC 93-71, Side 1). Representative Brown asked the average cost per kilowatt hour for residential and commercial uses in Juneau, Anchorage and Fairbanks. She pointed out that the comparisons are currently based on non-compatible information. HB 216 was HELD in Committee for further discussion. ADJOURNMENT The meeting adjourned at 11:55 a.m. 23