HOUSE FINANCE COMMITTEE MARCH 9, 1993 1:35 P.M. TAPE HFC 93 - 41, Side 1, #000 - end. TAPE HFC 93 - 41, Side 2, #000 - end. TAPE HFC 93 - 42, Side 1, #000 - end. TAPE HFC 93 - 42, Side 2, #000 - #286. CALL TO ORDER Co-Chair Ron Larson called the meeting of the House Finance Committee to order at 1:35 P.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 Carl Moses; Representative Fran Ulmer; Representative Gary Davis; Representative Irene Nicholia; Representative Con Bunde; Representative Ed Willis; Representative Cynthia Toohey; Molly McCammon, Aid to Representative Carl Moses; Paul Dick, Juneau Operations, Income & Excise Audit Division, Department of Revenue; Bruce Geraghty, Deputy Commissioner, Department of Community and Regional Affairs; Rupe Andrews, Capital City Task Force American Citizens, American Association of Retired Persons (AARP), Juneau, Alaska; Amos Wallace, Juneau, Alaska; Crystal Smith, Alaska Municipal League, Juneau, Alaska; Margo Knuth, Criminal Division, Department of Law; Marcia McKenzie, Council on Domestic Violence and Sexual Assault, (CDVSA), Juneau, Alaska; Sam Trivette, Director of Community Corrections, Department of Corrections. SUMMARY INFORMATION HB 55 An Act making appropriations for the operating and loan program expenses of state government and to capitalize funds; and providing for an effective date. HB 56 An Act making appropriations for operating expenses for certain programs for which the costs are derived from mandated formulas or criteria, 1 and for expenses for certain leases and contracts for state services and operations; and providing for an effective date. Incorporated subcommittee recommendations for the Department of Fish and Game and the Department of Law. HB 64 An Act creating the crimes of stalking in the first and second degrees and providing penalties for their violation; providing a peace officer with the authority to arrest without a warrant a person the peace officer has reasonable cause to believe has committed stalking; relating to the release before trial of a person accused of stalking; and prohibiting the suspension of imposition of sentence of a person convicted of stalking. HB 64 was held in Committee for further discussion. HB 133 An Act amending the definition of `value' for purposes of administration of fisheries taxes; and providing for an effective date. HB 133 was reported out of Committee with a "do pass" recommendation and a fiscal note by the Department of Revenue dated 2/17/93. HB 66 An Act relating to municipal property tax exemptions for certain residences and to property tax equivalency payments for certain residents; and providing for an effective date. HB 66 was held in Committee for further discussion. It was placed in subcommittee with Representative MacLean as Chair and with members Representative Martin and Representative Grussendorf. DEPARTMENT OF LAW The Department of Law House Finance Subcommittee was Chaired by Representative Larson with members Representative Porter, Representative Olberg, Representative Davidson, Representative Navarre and Representative Barnes. Co-Chair Larson provided the Committee with handouts. [Attachment #1 & #3]. He stated that the target reduction for the Subcommittee was $610,900 thousand dollars. The Subcommittee used the Governor's 1994 proposed budget from 2 which to base the increment/decrements. Co-Chair Larson referenced "The Transaction Summary for the Governor to the House" [Attachment #1]. The Subcommittee made four changes to the Governor's proposed budget. * Prosecution - reduction - $47.4 thousand dollar * Legal Services - Operations Divisions The Governor proposed an increase of twelve attorneys to work on natural resource issues. The proposed increment to the Governor's budget would be $1.998 million dollars. The Subcommittee reduced that increment by $549.9 thousand dollars. * Exxon Valdez Litigation - reduction: $3.462 million dollars. With the completion of the Alyeska settlement, the Department of Law stated they could reduce the request by $1.433 million dollars. The Subcommittee recommends a reduction of $1.5 million dollars. Co-Chair Larson noted the proposed decrement to the Department of Law budget would be $2.473 million dollars general funds, adding back the $50 thousand dollar increment for the position in Barrow. This would make the total proposed reduction - $1.197 million dollars in general funds for the FY 94 budget. The Law Subcommittee addressed the supplemental bill HB 135. The Department of Law addresses five sections. * Section 8 increases the supplemental request for $400 thousand dollars for prosecution costs. * Section 9 is a request for $6.600 million dollars in general funds and $2.200 million dollars in Permanent Fund Corporation receipts for oil and gas litigation. [Attachment #2]. * Section 10 requests $280 thousand dollars for outside counsel to the Department of Law in joint proceedings with the Federal Communications Commission and the Alaska Public Utilities Commission. * Section 11 is a request for $35 thousand dollars for implementing the 1992 Subsistence Law. 3 * Section 12 is a request for $1.087 million dollars in judgement claims. Co-Chair Larson explained that the Governor has requested an increase of $220.4 thousand dollars in "other fund" increments. These would be interagency receipts obtained from Alaska Housing Finance Corporation for the Department of Law to provide legal support. Co-Chair Larson recommended the increment be zeroed out. Representative Grussendorf questioned the $549.8 thousand dollar decrement to natural resource PCN's. Co-Chair Larson replied, the Governor's budget requested twelve full time positions at a cost of $1.998 million dollars. The Subcommittee reduced the recommendation by half. Representative Grussendorf noted his concern with inadequate protection of the State fishery resources placing the State at a disadvantage in treaty negotiations. Representative Hoffman pointed out that the Department of Law has received an increase of thirty positions since 1992. Co-Chair Larson MOVED incorporating the Department of Law Subcommittee recommendations including the amendment reduction of $220.4 thousand dollars into HB 55. There being NO OBJECTIONS, it was incorporated. DEPARTMENT OF FISH AND GAME The Department of Fish and Game Subcommittee was Chaired by Representative Hanley with members Representative Moses, Representative Hudson, Representative Bunde, Representative Gail Phillips, Representative Hoffman, Representative Davidson, Representative Nicholia and Representative Grussendorf. Representative Hanley provided the Committee with handouts of the Department of Fish and Game Subcommittee proposed budget closeouts. [Attachments #4 & #5]. He stated, the FY 93 authorized general fund amount was $46.889 million dollars. The FY 93 supplemental added an additional $584.3 thousand dollars. The Governor's proposed FY 93 is $44.256 million dollars. The Subcommittee was able to reach a two percent reduction beyond that proposed by the Governor. The Subcommittee did not have any increments, although there were switches within the Department. Representative Hanley pointed out that in FY 92, the Department of Fish and Game began reducing funds that provided economic development to the commercial fisheries. 4 The goal of the Subcommittee was to increase commercial fish harvest opportunities. Representative Hanley referenced Attachment #5, "The Transaction Summary for the Governor to the House". * Commercial Fisheries total component increase of $333.2 thousand dollars increasing the harvest opportunities by $333.2 thousand dollars. * Special Projects decrement of $20.4 thousand dollars. * Sport Fisheries decrement of $488.7 thousand dollars. * F.R.E.D. increment of $297.4 thousand dollars. He pointed out that four hatcheries had been zeroed out last year. This increment would allow the Department more time for the closure transition of those hatcheries. Funds had been added back to Deer Mountain Hatchery and Crooker Creek Hatchery. * Wildlife Conservation decrement for $318.9 thousand dollars. Fees have been switched from this component. * Administration and Support decrement for $131.0 thousand dollars. * Boards of Fisheries and Game decrement for $21.9 thousand dollars. * Advisory Committee/Regional Council reduction for $240.5 thousand dollars including a reduction of regional coordinators. * Habitat decrement of $50.0 thousand dollars. * Special Projects reduction from the 470 Funds from the Department of Environmental Conservation for $25.2 thousand dollars. * Subsistence reduction for $63.9 thousand dollars. Representative Hanley reiterated, the Fish and Game Subcommittee's recommended closeout would be two percent below the Governor's proposed budget and five percent below last year. 5 Co-Chair MacLean asked if there were any duplication of projects requested in the capital budget and the subcommittee proposals. Representative Hanley stated there was not. Co-Chair MacLean noted for the record that the Department of Fish and Game recommended the closure of the Kotzebuque Office asking that it be transferred to Fairbanks. She advised that subsistence offices should be located at the regional areas and should not be moved to the urban centers. Representative Hoffman stressed his concern in spending less money on the management of renewable resources. He felt the State could benefit in the long run from better resource management. Representative Hanley MOVED incorporating the Subcommittee recommendations into HB 55. There being NO OBJECTION, it was incorporated. (Tape Change HFC 93-41, Side 2). HOUSE BILL 133 "An Act amending the definition of `value' for purposes of administration of fisheries taxes; and providing for an effective date." MOLLY MCCAMMON, AID TO REPRESENTATIVE CARL MOSES, stated that HB 133 is substantially similar to existing law but restructures the definition of "value" used in administering fisheries taxes in order to enhance clarity. The bill is identical to Resources CSHB 448, introduced by Representative Gail Phillips last session, with some further clarification recommended by the Division of Legal Services. The legislation has not received any known opposition. She pointed out, in the past processors and fishermen have disputed the definition of "value" in paying the raw fisheries tax and salmon enhancement tax. The argument is that bonuses and delivery costs are not part of the actual amount paid fishermen for their fish. The interpretation leaves an opening for processors to pay lower prices for fish, and make up for this low price by giving bonuses for services such as delivery or handling. HB 133 clarifies exactly what services and forms of payment are subject to these taxes. PAUL DICK, JUNEAU OPERATIONS, INCOME & EXCISE AUDIT DIVISION, DEPARTMENT OF REVENUE, noted that the Department of Revenue supports the proposed legislation and added that 6 it would enhance State revenues. Representative Hoffman questioned if the Department of Revenue thought that processors were currently complying with the law. Mr. Dick thought the processors at large were reporting to the Department. He pointed out that the legislation would most directly affect the mid-size and smaller processors. Representative Hoffman asked where those increased funds would originate. Mr. Dick replied, the fiscal note represents the amount derived from the increased value on fish. The difference would be delivery costs and other charges currently subtracted from the value of the fish. Representative Martin asked if revenue would be shared on a 50\50 percentage. Mr. Dick stated it would. Co-Chair MacLean inquired which processors would be impacted by the legislation. Mr. Dick replied that all processors would be affected. Representative Martin MOVED to report HB 133 out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. HB 133 was reported out of Committee with a "do pass" recommendations and with a fiscal noted by the Department of Revenue dated 2/17/93. HOUSE BILL 66 "An Act relating to municipal property tax exemptions for certain residences and to property tax equivalency payments for certain residents; and providing for an effective date." BRUCE GERAGHTY, DEPUTY COMMISSIONER, DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS, stated that the Legislature created the mandatory tax exemption program in 1973. However, since 1985 the Legislature has failed to fully refund to communities the total cost of this mandated exemption. The renters rebate program was established in 1976 as a means of providing the same benefit to seniors and disabled veterans that rent their residences. The estimated cost of the property tax program in FY 94 would be $15.4 million dollars. The Departments proposed FY 94 budget does not fund either program. The Department strongly supports making the senior citizens\disabled veterans property tax exemption available to municipalities as an optional local tax exemption 7 program. Mr. Geraghty added, in the Department's preliminary research, the deferral concept appears to benefit municipalities in the long run through payment of property taxes at the time of sale. Deferred taxes would be accounted for as a current year receivable, the same as taxes paid, even through the moneys might not be paid for several years. He stated the work draft provided four options for the municipality to exercise. * Implement an exemption for senior citizens and/or disabled veterans. * Implement a deferral for seniors and/or disabled veterans. * Implement a combination of the two above mentioned. * Municipalities can decide not to do either. Both groups would then be taxed. Mr. Geraghty stated that the renter's rebate program is being repealed with the proposed legislation. Representative Brown asked if the disabled veterans benefit would be repealed with the proposed legislation. Mr. Geraghty stated those programs would become a option for the local municipalities to adopt. Representative Brown questioned the options chosen by DCRA. Mr. Geraghty stated the Department felt there were only two options available: Fully funding them or to have the local municipalities tailor a programs addressing their senior and veteran populations. Representative Brown advised changing the option to a "needs" based program. She pointed out that currently thirty-six states have a "needs" based program. There are over ten thousand persons taking advantage of receiving benefit from the tax exemption and another thousand persons who are receiving benefit from the renter's rebate program. She added, for each person who is not able to maintain independently, large costs will accrue to society. Mr. Geraghty advised that the renter's rebate program was instituted in the early 1980's to parallel the property tax exemption. It was to provide the same type of benefit to seniors and disabled veterans who rented which was being received by those who owned their own property. Representative Brown asked if municipalities would be covering that cost. Mr. Geraghty thought the program would 8 disappear with the passage of the legislation. Representative Grussendorf proposed that the Legislature offer the municipalities the option to exercise the proposed programs with a twenty-five percent legislative subsidy. REPRESENTATIVE CON BUNDE stated in 1973, the total cost of the property tax exemption program was $197.5 thousand dollars. The program was fully funded for the last time in 1985. The number of applicants has doubled over the years and the growth in the exemption program from FY 92 to FY 93 increased by fourteen percent. The current value of an exemption is $1,374 thousand dollars. Representative Bunde added, the non-exempt taxpayers in Alaska's municipalities are required to pay an additional $10 million dollars in property taxes for FY 93, seventy- eight percent of the cost of the program. Representative Bunde noted A.S. 29.45.030(e) requires municipalities to exempt from local property tax the real property owned and occupied as the primary residence and permanent place of abode by: 1. Resident 65 years or older; 2. Disabled veteran; 3. Resident at least 60 years old who is the widow or widower of a person qualified for such an exemption, up to an assessed value of $150,000. The exemption is currently mandatory. The HESS Committee Substitute is written broadly enough to give the municipalities the ability to limit the time on the deferral, or exemption if they so desire. (Tape Change, HFC 93-42, Side 1). Representative Bunde concluded, the Governor's Committee Substitute cuts out what they feel is restrictive language from A.S. 29.45.030(e), the assessed value up to $150 thousand dollars, and would also take widows and widowers who were currently on the exemption program and make them ineligible for any program. Representative Martin asked the limitations on deferral for tax rebate. Representative Bunde stated there would be none as the municipalities funding does not have any limitations on services provided. Representative Navarre interjected that the senior citizens 9 on fixed incomes would be the ones most significantly harmed. RUPE ANDREWS, CAPITOL CITY TASK FORCE, AMERICAN ASSOCIATION OF RETIRED PERSONS (AARP), JUNEAU, ALASKA, testified in opposition to HB 66. He stressed the importance of senior spending in Alaska from pensions, annuities, investments, social security which exceeds $1.2 million dollars per year. He felt that seniors should be encouraged to remain in Alaska HB 66 will have a negative impact on seniors in Alaska. To date, Alaska has been considered unique in it's policies to assist seniors in having a quality life. The Pioneer Homes are often shown to visitors with pride by Alaskans. Additionally, seniors have always been a desireable social resource. State policy until now has recognized the elder resource. Mr. Andrews stated, HB 66 would remove the mandatory objections of municipalities to forgive personal property taxes and make property exemption a local decision and places a lien against that property until the owners die or move. The problem is that the State has failed to fully fund the tax forgiveness program thus forcing the cities into some financial burdens. AARP requests that the Legislature hold public meetings and develop a comprehensive policy. Representative Martin pointed out that currently the State pays $178 million dollars per year on senior programs. Mr. Andrews noted that last year, the seniors brought to Alaska $1.2 million dollars from various programs. He stated that the cost benefit ratio has been exceeded. Representative Parnell asked if there is a state which has a comprehensive policy toward seniors. Mr. Andrews offered to provide that information to the Committee. AMOS WALLACE, SENIOR CITIZEN, JUNEAU, ALASKA, testified in opposition of the proposed legislation and expressed his concern with loosing his property. Representative Bunde responded there will be a deferral option which would allow no taxes to be paid until the owner was deceased or moved. He noted that twenty-seven other states offer their seniors a deferral option. CRYSTAL SMITH, ALASKA MUNICIPAL LEAGUE (AML), JUNEAU, ALASKA, testified that the proposed legislation would economically impact senior citizens and disabled veterans. This impact has extensively affected the local 10 municipalities for many years. The program has grown over twenty percent in the last year. AML wants to address the concern. 1. AML's first choice would be that the Legislature fully fund the mandate. She added, since 1985 this has not occurred. 2. AML encourages a State rebate program. Whatever amount the Legislature would commit to the program would go directly to the seniors. 3. An ordinance presented to the voters for approval. She felt the voters would opt to vote for some type of "needs" based exemption. Co-Chair Larson placed HB 66 in Subcommittee with Chair Representative MacLean and with members Representative Martin and Representative Grussendorf. HB 66 was HELD in Committee for further discussion. HOUSE BILL 64 "An Act creating the crimes of stalking in the first and second degrees and providing penalties for their violation; providing a peace officer with the authority to arrest without a warrant a person the peace officer has reasonable cause to believe has committed stalking; relating to the release before trial of a person accused of stalking; and prohibiting the suspension of imposition of sentence of a person convicted of stalking." REPRESENTATIVE CYNTHIA TOOHEY testified that FBI reports thirty percent of female murder victims in 1990 were slain by husbands or boyfriends. Following a stalking death of an actress, California reacted by passing the first "anti stalking" law. Thirty-one other states have followed suit. These laws are the result of stalking victims' frustrations with the current inability of law enforcement officials to intervene prior to a victim being physically attacked. One in twenty adults will be stalked in their lifetime, researchers say. HB 64 was modeled after the Michigan Law which was passed in 1992. It is supported by the Department of Law, the Council on Domestic Violence and Sexual Assault, the Department of Public Safety, the Homer and Anchorage Police Departments and the Alaska Association of Chiefs of Police. Representative Navarre asked if violation of a temporary restraining order would result in a felony charge of 11 stalking. MARGO KNUTH, CRIMINAL DIVISION, DEPARTMENT OF LAW, testified violation of a restraining order would meet the element of stalking. (Tape Change, HFC 93-42, Side 2). Ms. Knuth stated the elements of the stalking offense is "knowingly engaging in a course of conduct, recklessly placing another person in fear of death or physical injury". The course of conduct is based upon repeated non-consensual contact. Representative Martin asked the approximate number of cases per year would be filed. Ms. Knuth expected that statewide, twelve cases per year would be filed and of those none would most likely go to trial. Representative Martin asked how many of the twelve cases would be convicted. Ms. Knuth thought over half would be convicted. Representative Martin noted his concern with added probation costs that the bill would incur. MARCIA MCKENZIE, COUNCIL ON DOMESTIC VIOLENCE AND SEXUAL ASSAULT, (CDVSA) JUNEAU, ALASKA testified in support of HB 64 and urged quick and prompt passage of the legislation. Representative Brown pointed out there would be fiscal impact by the Department of Corrections. Ms. Knuth replied probation revocation is based on a new offense. She added the convicted person would be spending the same amount of time in jail. From the prosecutors point of view, it is easier to put someone back in jail on a probation revocation. SAM TRIVETTE, DIRECTOR OF COMMUNITY CORRECTIONS, DEPARTMENT OF CORRECTIONS, stated the Department of Corrections provided a zero fiscal note because of experience based upon previous probations matters, judges can currently place those convicted on probation for five years. Nearly all violations occur in the first five year period. Representative Brown disagreed and reiterated her argument that there would be fiscal impact to that Department. Co-Chair Larson stated HB 64 would be HELD in Committee for further discussion. ADJOURNMENT The meeting adjourned at 3:45 P.M. 12 HOUSE FINANCE COMMITTEE MARCH 9, 1993 1:35 P.M. TAPE HFC 93 - 41, Side 1, #000 - end. TAPE HFC 93 - 41, Side 2, #000 - end. TAPE HFC 93 - 42, Side 1, #000 - end. TAPE HFC 93 - 42, Side 2, #000 - #286. CALL TO ORDER Co-Chair Ron Larson called the meeting of the House Finance Committee to order at 1:35 P.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 Carl Moses; Representative Fran Ulmer; Representative Gary Davis; Representative Irene Nicholia; Representative Con Bunde; Representative Ed Willis; Representative Cynthia Toohey; Molly McCammon, Aid to Representative Carl Moses; Paul Dick, Juneau Operations, Income & Excise Audit Division, Department of Revenue; Bruce Geraghty, Deputy Commissioner, Department of Community and Regional Affairs; Rupe Andrews, Capital City Task Force American Citizens, American Association of Retired Persons (AARP), Juneau, Alaska; Amos Wallace, Juneau, Alaska; Crystal Smith, Alaska Municipal League, Juneau, Alaska; Margo Knuth, Criminal Division, Department of Law; Marcia McKenzie, Council on Domestic Violence and Sexual Assault, (CDVSA), Juneau, Alaska; Sam Trivette, Director of Community Corrections, Department of Corrections. SUMMARY INFORMATION HB 55 An Act making appropriations for the operating and loan program expenses of state government and to capitalize funds; and providing for an effective date. 13 HB 56 An Act making appropriations for operating expenses for certain programs for which the costs are derived from mandated formulas or criteria, and for expenses for certain leases and contracts for state services and operations; and providing for an effective date. Incorporated subcommittee recommendations for the Department of Fish and Game and the Department of Law. HB 64 An Act creating the crimes of stalking in the first and second degrees and providing penalties for their violation; providing a peace officer with the authority to arrest without a warrant a person the peace officer has reasonable cause to believe has committed stalking; relating to the release before trial of a person accused of stalking; and prohibiting the suspension of imposition of sentence of a person convicted of stalking. HB 64 was held in Committee for further discussion. HB 133 An Act amending the definition of `value' for purposes of administration of fisheries taxes; and providing for an effective date. HB 133 was reported out of Committee with a "do pass" recommendation and a fiscal note by the Department of Revenue dated 2/17/93. HB 66 An Act relating to municipal property tax exemptions for certain residences and to property tax equivalency payments for certain residents; and providing for an effective date. HB 66 was held in Committee for further discussion. It was placed in subcommittee with Representative MacLean as Chair and with members Representative Martin and Representative Grussendorf. DEPARTMENT OF LAW The Department of Law House Finance Subcommittee was Chaired by Representative Larson with members Representative Porter, Representative Olberg, Representative Davidson, Representative Navarre and Representative Barnes. Co-Chair Larson provided the Committee with handouts. 14 [Attachment #1 & #3]. He stated that the target reduction for the Subcommittee was $610,900 thousand dollars. The Subcommittee used the Governor's 1994 proposed budget from which to base the increment/decrements. Co-Chair Larson referenced "The Transaction Summary for the Governor to the House" [Attachment #1]. The Subcommittee made four changes to the Governor's proposed budget. * Prosecution - reduction - $47.4 thousand dollar * Legal Services - Operations Divisions The Governor proposed an increase of twelve attorneys to work on natural resource issues. The proposed increment to the Governor's budget would be $1.998 million dollars. The Subcommittee reduced that increment by $549.9 thousand dollars. * Exxon Valdez Litigation - reduction: $3.462 million dollars. With the completion of the Alyeska settlement, the Department of Law stated they could reduce the request by $1.433 million dollars. The Subcommittee recommends a reduction of $1.5 million dollars. Co-Chair Larson noted the proposed decrement to the Department of Law budget would be $2.473 million dollars general funds, adding back the $50 thousand dollar increment for the position in Barrow. This would make the total proposed reduction - $1.197 million dollars in general funds for the FY 94 budget. The Law Subcommittee addressed the supplemental bill HB 135. The Department of Law addresses five sections. * Section 8 increases the supplemental request for $400 thousand dollars for prosecution costs. * Section 9 is a request for $6.600 million dollars in general funds and $2.200 million dollars in Permanent Fund Corporation receipts for oil and gas litigation. [Attachment #2]. * Section 10 requests $280 thousand dollars for outside counsel to the Department of Law in joint proceedings with the Federal Communications Commission and the Alaska Public Utilities Commission. 15 * Section 11 is a request for $35 thousand dollars for implementing the 1992 Subsistence Law. * Section 12 is a request for $1.087 million dollars in judgement claims. Co-Chair Larson explained that the Governor has requested an increase of $220.4 thousand dollars in "other fund" increments. These would be interagency receipts obtained from Alaska Housing Finance Corporation for the Department of Law to provide legal support. Co-Chair Larson recommended the increment be zeroed out. Representative Grussendorf questioned the $549.8 thousand dollar decrement to natural resource PCN's. Co-Chair Larson replied, the Governor's budget requested twelve full time positions at a cost of $1.998 million dollars. The Subcommittee reduced the recommendation by half. Representative Grussendorf noted his concern with inadequate protection of the State fishery resources placing the State at a disadvantage in treaty negotiations. Representative Hoffman pointed out that the Department of Law has received an increase of thirty positions since 1992. Co-Chair Larson MOVED incorporating the Department of Law Subcommittee recommendations including the amendment reduction of $220.4 thousand dollars into HB 55. There being NO OBJECTIONS, it was incorporated. DEPARTMENT OF FISH AND GAME The Department of Fish and Game Subcommittee was Chaired by Representative Hanley with members Representative Moses, Representative Hudson, Representative Bunde, Representative Gail Phillips, Representative Hoffman, Representative Davidson, Representative Nicholia and Representative Grussendorf. Representative Hanley provided the Committee with handouts of the Department of Fish and Game Subcommittee proposed budget closeouts. [Attachments #4 & #5]. He stated, the FY 93 authorized general fund amount was $46.889 million dollars. The FY 93 supplemental added an additional $584.3 thousand dollars. The Governor's proposed FY 93 is $44.256 million dollars. The Subcommittee was able to reach a two percent reduction beyond that proposed by the Governor. The Subcommittee did not have any increments, although there were switches within the Department. 16 Representative Hanley pointed out that in FY 92, the Department of Fish and Game began reducing funds that provided economic development to the commercial fisheries. The goal of the Subcommittee was to increase commercial fish harvest opportunities. Representative Hanley referenced Attachment #5, "The Transaction Summary for the Governor to the House". * Commercial Fisheries total component increase of $333.2 thousand dollars increasing the harvest opportunities by $333.2 thousand dollars. * Special Projects decrement of $20.4 thousand dollars. * Sport Fisheries decrement of $488.7 thousand dollars. * F.R.E.D. increment of $297.4 thousand dollars. He pointed out that four hatcheries had been zeroed out last year. This increment would allow the Department more time for the closure transition of those hatcheries. Funds had been added back to Deer Mountain Hatchery and Crooker Creek Hatchery. * Wildlife Conservation decrement for $318.9 thousand dollars. Fees have been switched from this component. * Administration and Support decrement for $131.0 thousand dollars. * Boards of Fisheries and Game decrement for $21.9 thousand dollars. * Advisory Committee/Regional Council reduction for $240.5 thousand dollars including a reduction of regional coordinators. * Habitat decrement of $50.0 thousand dollars. * Special Projects reduction from the 470 Funds from the Department of Environmental Conservation for $25.2 thousand dollars. * Subsistence reduction for $63.9 thousand dollars. Representative Hanley reiterated, the Fish and Game Subcommittee's recommended closeout would be two percent 17 below the Governor's proposed budget and five percent below last year. Co-Chair MacLean asked if there were any duplication of projects requested in the capital budget and the subcommittee proposals. Representative Hanley stated there was not. Co-Chair MacLean noted for the record that the Department of Fish and Game recommended the closure of the Kotzebuque Office asking that it be transferred to Fairbanks. She advised that subsistence offices should be located at the regional areas and should not be moved to the urban centers. Representative Hoffman stressed his concern in spending less money on the management of renewable resources. He felt the State could benefit in the long run from better resource management. Representative Hanley MOVED incorporating the Subcommittee recommendations into HB 55. There being NO OBJECTION, it was incorporated. (Tape Change HFC 93-41, Side 2). HOUSE BILL 133 "An Act amending the definition of `value' for purposes of administration of fisheries taxes; and providing for an effective date." MOLLY MCCAMMON, AID TO REPRESENTATIVE CARL MOSES, stated that HB 133 is substantially similar to existing law but restructures the definition of "value" used in administering fisheries taxes in order to enhance clarity. The bill is identical to Resources CSHB 448, introduced by Representative Gail Phillips last session, with some further clarification recommended by the Division of Legal Services. The legislation has not received any known opposition. She pointed out, in the past processors and fishermen have disputed the definition of "value" in paying the raw fisheries tax and salmon enhancement tax. The argument is that bonuses and delivery costs are not part of the actual amount paid fishermen for their fish. The interpretation leaves an opening for processors to pay lower prices for fish, and make up for this low price by giving bonuses for services such as delivery or handling. HB 133 clarifies exactly what services and forms of payment are subject to these taxes. 18 PAUL DICK, JUNEAU OPERATIONS, INCOME & EXCISE AUDIT DIVISION, DEPARTMENT OF REVENUE, noted that the Department of Revenue supports the proposed legislation and added that it would enhance State revenues. Representative Hoffman questioned if the Department of Revenue thought that processors were currently complying with the law. Mr. Dick thought the processors at large were reporting to the Department. He pointed out that the legislation would most directly affect the mid-size and smaller processors. Representative Hoffman asked where those increased funds would originate. Mr. Dick replied, the fiscal note represents the amount derived from the increased value on fish. The difference would be delivery costs and other charges currently subtracted from the value of the fish. Representative Martin asked if revenue would be shared on a 50\50 percentage. Mr. Dick stated it would. Co-Chair MacLean inquired which processors would be impacted by the legislation. Mr. Dick replied that all processors would be affected. Representative Martin MOVED to report HB 133 out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. HB 133 was reported out of Committee with a "do pass" recommendations and with a fiscal noted by the Department of Revenue dated 2/17/93. HOUSE BILL 66 "An Act relating to municipal property tax exemptions for certain residences and to property tax equivalency payments for certain residents; and providing for an effective date." BRUCE GERAGHTY, DEPUTY COMMISSIONER, DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS, stated that the Legislature created the mandatory tax exemption program in 1973. However, since 1985 the Legislature has failed to fully refund to communities the total cost of this mandated exemption. The renters rebate program was established in 1976 as a means of providing the same benefit to seniors and disabled veterans that rent their residences. The estimated cost of the property tax program in FY 94 would be $15.4 million dollars. The Departments proposed FY 94 budget does not fund either program. 19 The Department strongly supports making the senior citizens\disabled veterans property tax exemption available to municipalities as an optional local tax exemption program. Mr. Geraghty added, in the Department's preliminary research, the deferral concept appears to benefit municipalities in the long run through payment of property taxes at the time of sale. Deferred taxes would be accounted for as a current year receivable, the same as taxes paid, even through the moneys might not be paid for several years. He stated the work draft provided four options for the municipality to exercise. * Implement an exemption for senior citizens and/or disabled veterans. * Implement a deferral for seniors and/or disabled veterans. * Implement a combination of the two above mentioned. * Municipalities can decide not to do either. Both groups would then be taxed. Mr. Geraghty stated that the renter's rebate program is being repealed with the proposed legislation. Representative Brown asked if the disabled veterans benefit would be repealed with the proposed legislation. Mr. Geraghty stated those programs would become a option for the local municipalities to adopt. Representative Brown questioned the options chosen by DCRA. Mr. Geraghty stated the Department felt there were only two options available: Fully funding them or to have the local municipalities tailor a programs addressing their senior and veteran populations. Representative Brown advised changing the option to a "needs" based program. She pointed out that currently thirty-six states have a "needs" based program. There are over ten thousand persons taking advantage of receiving benefit from the tax exemption and another thousand persons who are receiving benefit from the renter's rebate program. She added, for each person who is not able to maintain independently, large costs will accrue to society. Mr. Geraghty advised that the renter's rebate program was instituted in the early 1980's to parallel the property tax exemption. It was to provide the same type of benefit to seniors and disabled veterans who rented which was being 20 received by those who owned their own property. Representative Brown asked if municipalities would be covering that cost. Mr. Geraghty thought the program would disappear with the passage of the legislation. Representative Grussendorf proposed that the Legislature offer the municipalities the option to exercise the proposed programs with a twenty-five percent legislative subsidy. REPRESENTATIVE CON BUNDE stated in 1973, the total cost of the property tax exemption program was $197.5 thousand dollars. The program was fully funded for the last time in 1985. The number of applicants has doubled over the years and the growth in the exemption program from FY 92 to FY 93 increased by fourteen percent. The current value of an exemption is $1,374 thousand dollars. Representative Bunde added, the non-exempt taxpayers in Alaska's municipalities are required to pay an additional $10 million dollars in property taxes for FY 93, seventy- eight percent of the cost of the program. Representative Bunde noted A.S. 29.45.030(e) requires municipalities to exempt from local property tax the real property owned and occupied as the primary residence and permanent place of abode by: 1. Resident 65 years or older; 2. Disabled veteran; 3. Resident at least 60 years old who is the widow or widower of a person qualified for such an exemption, up to an assessed value of $150,000. The exemption is currently mandatory. The HESS Committee Substitute is written broadly enough to give the municipalities the ability to limit the time on the deferral, or exemption if they so desire. (Tape Change, HFC 93-42, Side 1). Representative Bunde concluded, the Governor's Committee Substitute cuts out what they feel is restrictive language from A.S. 29.45.030(e), the assessed value up to $150 thousand dollars, and would also take widows and widowers who were currently on the exemption program and make them ineligible for any program. Representative Martin asked the limitations on deferral for tax rebate. Representative Bunde stated there would be none as the municipalities funding does not have any limitations 21 on services provided. Representative Navarre interjected that the senior citizens on fixed incomes would be the ones most significantly harmed. RUPE ANDREWS, CAPITOL CITY TASK FORCE, AMERICAN ASSOCIATION OF RETIRED PERSONS (AARP), JUNEAU, ALASKA, testified in opposition to HB 66. He stressed the importance of senior spending in Alaska from pensions, annuities, investments, social security which exceeds $1.2 million dollars per year. He felt that seniors should be encouraged to remain in Alaska HB 66 will have a negative impact on seniors in Alaska. To date, Alaska has been considered unique in it's policies to assist seniors in having a quality life. The Pioneer Homes are often shown to visitors with pride by Alaskans. Additionally, seniors have always been a desireable social resource. State policy until now has recognized the elder resource. Mr. Andrews stated, HB 66 would remove the mandatory objections of municipalities to forgive personal property taxes and make property exemption a local decision and places a lien against that property until the owners die or move. The problem is that the State has failed to fully fund the tax forgiveness program thus forcing the cities into some financial burdens. AARP requests that the Legislature hold public meetings and develop a comprehensive policy. Representative Martin pointed out that currently the State pays $178 million dollars per year on senior programs. Mr. Andrews noted that last year, the seniors brought to Alaska $1.2 million dollars from various programs. He stated that the cost benefit ratio has been exceeded. Representative Parnell asked if there is a state which has a comprehensive policy toward seniors. Mr. Andrews offered to provide that information to the Committee. AMOS WALLACE, SENIOR CITIZEN, JUNEAU, ALASKA, testified in opposition of the proposed legislation and expressed his concern with loosing his property. Representative Bunde responded there will be a deferral option which would allow no taxes to be paid until the owner was deceased or moved. He noted that twenty-seven other states offer their seniors a deferral option. CRYSTAL SMITH, ALASKA MUNICIPAL LEAGUE (AML), JUNEAU, 22 ALASKA, testified that the proposed legislation would economically impact senior citizens and disabled veterans. This impact has extensively affected the local municipalities for many years. The program has grown over twenty percent in the last year. AML wants to address the concern. 1. AML's first choice would be that the Legislature fully fund the mandate. She added, since 1985 this has not occurred. 2. AML encourages a State rebate program. Whatever amount the Legislature would commit to the program would go directly to the seniors. 3. An ordinance presented to the voters for approval. She felt the voters would opt to vote for some type of "needs" based exemption. Co-Chair Larson placed HB 66 in Subcommittee with Chair Representative MacLean and with members Representative Martin and Representative Grussendorf. HB 66 was HELD in Committee for further discussion. HOUSE BILL 64 "An Act creating the crimes of stalking in the first and second degrees and providing penalties for their violation; providing a peace officer with the authority to arrest without a warrant a person the peace officer has reasonable cause to believe has committed stalking; relating to the release before trial of a person accused of stalking; and prohibiting the suspension of imposition of sentence of a person convicted of stalking." REPRESENTATIVE CYNTHIA TOOHEY testified that FBI reports thirty percent of female murder victims in 1990 were slain by husbands or boyfriends. Following a stalking death of an actress, California reacted by passing the first "anti stalking" law. Thirty-one other states have followed suit. These laws are the result of stalking victims' frustrations with the current inability of law enforcement officials to intervene prior to a victim being physically attacked. One in twenty adults will be stalked in their lifetime, researchers say. HB 64 was modeled after the Michigan Law which was passed in 1992. It is supported by the Department of Law, the Council on Domestic Violence and Sexual Assault, the Department of Public Safety, the Homer and Anchorage Police Departments and the Alaska Association of Chiefs of Police. 23 Representative Navarre asked if violation of a temporary restraining order would result in a felony charge of stalking. MARGO KNUTH, CRIMINAL DIVISION, DEPARTMENT OF LAW, testified violation of a restraining order would meet the element of stalking. (Tape Change, HFC 93-42, Side 2). Ms. Knuth stated the elements of the stalking offense is "knowingly engaging in a course of conduct, recklessly placing another person in fear of death or physical injury". The course of conduct is based upon repeated non-consensual contact. Representative Martin asked the approximate number of cases per year would be filed. Ms. Knuth expected that statewide, twelve cases per year would be filed and of those none would most likely go to trial. Representative Martin asked how many of the twelve cases would be convicted. Ms. Knuth thought over half would be convicted. Representative Martin noted his concern with added probation costs that the bill would incur. MARCIA MCKENZIE, COUNCIL ON DOMESTIC VIOLENCE AND SEXUAL ASSAULT, (CDVSA) JUNEAU, ALASKA testified in support of HB 64 and urged quick and prompt passage of the legislation. Representative Brown pointed out there would be fiscal impact by the Department of Corrections. Ms. Knuth replied probation revocation is based on a new offense. She added the convicted person would be spending the same amount of time in jail. From the prosecutors point of view, it is easier to put someone back in jail on a probation revocation. SAM TRIVETTE, DIRECTOR OF COMMUNITY CORRECTIONS, DEPARTMENT OF CORRECTIONS, stated the Department of Corrections provided a zero fiscal note because of experience based upon previous probations matters, judges can currently place those convicted on probation for five years. Nearly all violations occur in the first five year period. Representative Brown disagreed and reiterated her argument that there would be fiscal impact to that Department. Co-Chair Larson stated HB 64 would be HELD in Committee for further discussion. ADJOURNMENT 24 The meeting adjourned at 3:45 P.M. 25