HOUSE FINANCE COMMITTEE April 6, 1993 8:35 a.m. TAPE HFC 93-94, Side 1, #000 - end. TAPE HFC 93-94, Side 2, #000 - 601. CALL TO ORDER Co-Chair Larson called the House Finance Committee to order at 8:35 a.m. PRESENT Co-Chair Larson Vice-Chair Hanley Representative Brown Representative Martin Representative Foster Representative Navarre Representative Grussendorf Representative Parnell Representative Hoffman Representative Therriault Co-Chair MacLean was absent from the meeting. ALSO PRESENT Representative Hudson; Representative Williams; Representative Mulder; Christopher Gates, Director, Division of Economic Development, Department of Commerce and Economic Development; Stan Steadman, Executive Director, Kenai ARDOR; Juanita Hensley, Director, Driver's Safety, Department of Public Safety; John George, Alaska State Association of Firefighters; Margot Knuth, Criminal Division, Department of Law; Kent Swisher, Alaska Municipal League. SUMMARY INFORMATION HB 136 "An Act relating to the offenses of driving while intoxicated and refusal to submit to a breath test; and providing for an effective date." CSHB 136 (FIN) was reported out of Committee with "no recommendation" and with two zero fiscal notes by the Department of Administration, dated 3/26/93; and with a fiscal impact note by the Department of Public Safety, dated 3/26/93; and with a zero fiscal note by the Department of Public Safety, dated 3/5/93; and with a zero fiscal note by the Department of Law, dated 3/5/93; and with a fiscal impact note by the Department of Corrections. HB 140 "An Act relating to the king salmon tag fee." 1 CSHB 140 (FSH) was reported out of Committee with a "do pass" recommendation and with a fiscal impact note by the Department of Fish and Game, dated 3/12/93. HB 198 "An Act relating to the Alaska regional economic assistance program; and providing for an effective date." HB 198 was HELD in a Subcommittee consisting of Chair Hanley with members Representatives Parnell and Brown. HB 221 "An Act relating to workers' compensation for volunteer ambulance attendants, police officers, and fire fighters; and providing for an effective date." HB 221 was reported out of Committee with individual recommendations and with two zero fiscal notes by the Department of Administration and the Department of Labor. HB 244 "An Act making a special appropriation for additional district support for kindergarten, primary, and secondary education programs; and providing for an effective date." HB 244 was reported out of Committee with "no recommendation". HOUSE BILL NO. 198 "An Act relating to the Alaska regional economic assistance program; and providing for an effective date." Co-Chair Larson noted that HB 198 changes the Alaska Regional Development Organizations (ARDOR) Program by rasing the state grant funding cap to regional development organizations from $50.0 thousand dollars to $100.0 thousand dollars a year. The legislation will provide flexibility in assessing organizations' ability to raise matching funds. There is a $750.0 thousand dollar fiscal note from the Department of Commerce and Economic Development. CHRISTOPHER GATES, DIRECTOR, DIVISION OF ECONOMIC DEVELOPMENT, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT spoke in support of HB 198. He asserted that the ARDOR program is a jobs and economic development enhnacement. He stressed that rural areas have difficulty in providing a one 2 to one match. Representative Martin expressed concern with the grant increase. He asked why the grant should be raised. Mr. Gates emphasized that the programs are successful. He stressed that rural tourism is needed to put local residents to work. He observed that the Matanuska-Sustina Borough has proposed the creation of an ARDOR. Representative Martin asked for examples of ARDOR's accomplishments. Mr. Gates gave examples of accomplishments of the Kenai ARDOR (see testimony by Mr. Steadman.) Co-Chair Larson asked the definition or purpose of ARDORs. Mr. Gates stated that ARDORs assist local economies to create jobs and economic activity. Co-Chair Larson asked which projects would not have been developed without the help of an ARDOR. Mr. Gates mentioned the Forest Task Force Project in Kenai. He noted that the Seward sawmill was developed with ARDOR assistance. He added that Seward was developed as a cruise ship destination with the assistance of the area ARDOR. Co-Chair Larson asked if private grants are solicited. Mr. Gates replied that grants are solicited from private organization. STAN STEADMAN, EXECUTIVE DIRECTOR, KENAI ARDOR reviewed some of the accomplishments of the Kenai ARDOR. He concluded that the Kenai ARDOR: * Played a key role in obtaining close to $10 million in U.S. EDA assisted public works projects, to create 900 jobs; * Managed a nationally acclaimed media campaign to mitigate impact of the Exxon-Valdez oil spill; * Facilitated contacts between Ssangyong Oil of Korea and Stewart Petroleum leading to successful oil drilling in Cook Inlet; * Trained 475 persons through the Small Business Development Center; * Obtained federal funding for investigations of options for utilization of timber lost to the spruce bark beetle infestation; * Obtained federal funding for Shellfish mariculture; 3 * Obtained federal funding for development of health care programs. Mr. Steadman noted the difficulty ARDORs have in supporting their administrative costs. Representative Hanley observed that the first $50.0 thousand dollar grant does not require a match. Mr. Gates stated that the second $50.0 thousand dollars requires a 1 to 1 match by railbelt ARDORs and a 3 to 1 match by rural ARDORs. He clarified that matching requirements are specified in regulations of the Department of Commerce and Economic Development. Representative Hanley expressed concern that the first $50.0 thousand dollars is a grant. He felt that there should be a match for the entire amount. He suggested that ARDOR grants be discontinued after a period of time if no benefits or match is forthcoming. Mr. Gates emphasized that rural ARDORs cannot provide the match when no commercial base exists. Mr. Steadman stressed that ARDORs help residents to access state and local programs. Representative Brown noted that she is a board member of the Anchorage ARDOR. She observed that the Anchorage ARDOR instituted the proposal to consolidate procurement by the United States military in Anchorage. She noted that the Anchorage ARDOR has proposed amendments to HB 198. Co-Chair Larson HB 198 was HELD in a subcommittee consisting of Chair Hanley with Representatives Parnell and Brown. HOUSE BILL NO. 136 "An Act relating to the offenses of driving while intoxicated and refusal to submit to a breath test; and providing for an effective date." REPRESENTATIVE MULDER explained that HB 136 would allow alternative sentencing for DWI offenders. He observed that there is a nine month waiting period to serve DWI jail time. He asserted that the intent of DWI sentencing is to allow immediate 72 hour incarceration. Jail time could be served in a community residential center (CRC). Offenders would pay for their time in CRC detention. Offenders would perform community service during their CRC incarceration. Representative Mulder noted that the Department of Public Safety, Division of Motor Vehicles requested sections 4 referring to limited licensing. He explained that HB 136 will restrict limited licenses to first time offenders. JUANITA HENSLEY, DIRECTOR, DRIVER'S SAFETY, DIVISION OF MOTOR VEHICLES, DEPARTMENT OF PUBLIC SAFETY observed that the period of revocation would be reduced. She noted that under current law a limited license could be issue for as long as 25 years without review. She further explained limited licensing requirements. Representative Martin expressed concern that repeat offenders would not be dealt with as severely as under current law. Ms. Hensley clarified that only first and second offenders would be eligible for CRC placement. She noted that it is difficult to track limited licenses. Representative Martin expressed concern that the fiscal cost to the State is being increased. Representative Mulder observed that revenues will be derived through program receipts. Representative Mulder added that the court will be authorized to attach permanent fund dividend checks to reimburse the State for DWI offender's CRC incarceration, up to $1,000 thousand dollars. Representative Therriault asked if the Department of Law has been consulted concerning the constitutionality of the reimbursement cost. MARGOT KNUTH, CRIMINAL DIVISION, DEPARTMENT OF LAW explained that the CRC payment is capped at $1,000 thousand dollars. She emphasized that the amount would withstand a constitutional test. She added that the legislation contains provisions for indigent persons. Representative Parnell asked if Mothers Against Drunk Drivers (MADD) has reviewed CSHB 136 (JUD). Representative Mulder stated that MADD supports the judiciary version. Ms. Knuth clarified, in response to a question from Representative Brown, that it is against the law to refuse a breath test. No limited licenses will be issued to individuals that refuse breath tests. Ms. Hensley observed that the Department of Public Safety will be eligible for additional federal grants if the reduction in limited licenses as proposed in CSHB 136 (JUD) is adopted. Representative Therriault noted that current law allows a $250 dollar fine. Ms. Knuth clarified that $250 dollars is 5 the mandatory minimum amount that offenders can be fined. The maximum amount is $10,000. Representative Therriault felt that the current program should be revenue neutral. He asked if individuals are paying the $250 dollar fine. Ms. Knuth noted that current fines are deposited in the General Fund. She noted that there are costs to associated with reimbursments for the Public Defender, prosecution, judge, court clerk, corrections and probations. (Tape Change, HFC 93-94, Side 2) Representative Hanley noted that AS 28.151.181 (e) has been appealed. Representative Hanley MOVED to AMEND CSHB 136 (JUD) to delete references to AS 28.151. 181 (e) and add the appropriate statute reference. There being NO OBJECTION, it was so ordered. Representative Foster MOVED to report CSHB 136 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. Representative Martin asked the percentage of fines which have been paid to the State and the social economic background of offenders. Ms. Knuth stressed that there is no connection between the ability to pay and release. She emphasized that payment is set by regulation. She stated that empirical evidence indicates that the majority of DWI offenses are committed by working people and professionals. She restated that there is an indigent provision. There being NO OBJECTION, CSHB 136 (FIN) was moved from committee. CSHB 136 (FIN) was reported out of Committee with "no recommendation" and with two zero fiscal notes by the Department of Administration, dated 3/26/93; and with a fiscal impact note by the Department of Public Safety, dated 3/26/93; and with a zero fiscal note by the Department of Public Safety, dated 3/5/93; and with a zero fiscal note by the Department of Law, dated 3/5/93; and with a fiscal impact note by the Department of Corrections. HOUSE BILL NO. 140 "An Act relating to the king salmon tag fee." REPRESENTATIVE BILL HUDSON noted that CSHB140 (FSH) was introduced to address concerns raised by individuals in the tourism/sport fish industry. He noted that the current flat fee of $20.00, imposed on all nonresidents, is likely to discourage sport fish participation among short-time tourists. He felt that this is likely to have a detrimental impact on resident sport-guide businesses and 6 local economies. Representative Hudson noted that CSHB 140 (FSH) would institute a graduated fees schedule. Committee Substitute for HB 140 (FSH) would reappeal the flat $20.00 rate, while imposing a fee increases of $10, $15 and $30 with the validation periods of one, three and 14 days or an annual tag. He asserted that a graduated rate schedule insures that fees are commensurate with resource impacts. He asserted that the longer a nonresident participates in the State's fishery resource, the higher their fee will become. Representative Hudson noted that CSHB140(FSH) carries a positive fiscal note of $70.6 thousand dollar. Representative Hudson explained that intent language was added to underscore that fees should be appropriated to support King salmon support fishing research, management and enhancement projects. Residents would be required to purchase tags only for anadromous king salmon. He explained that there are a number of landlocked sport fishing activities that are open to children during special events. It is not the intention of the legislation to charge extra fees for events such as Derby Days. Representative Hudson clarified for Representative Therriault, that a one day tag would be $10 for the specific day. He added that the person would also have to have a nonresident license. Representative Foster MOVED to report CSHB 140 (FSH) out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CSHB 140 (FSH) was reported out of Committee with a "do pass" recommendation and with a fiscal impact note by the Department of Fish and Game, dated 3/12/93. HOUSE BILL NO. 244 "An Act making a special appropriation for additional district support for kindergarten, primary, and secondary education programs; and providing for an effective date." REPRESENTATIVE BILL WILLIAMS recognized that funding is currently contained in HB 55. Representative Martin MOVED to report HB 244 out of Committee with individual recommendations. There being NO OBJECTION, it was so ordered. 7 HB 244 was reported out of Committee with "no recommendation". HOUSE BILL NO. 221 "An Act relating to workers' compensation for volunteer ambulance attendants, police officers, and fire fighters; and providing for an effective date." Representative Hudson explained that House Bill 221 was introduced to clarify workers' compensation statutes that have been the cause of much confusion or misinterpretation, particularly with regard to benefits for volunteers. He emphasized that volunteers are extensively employed. He noted that workers' compensation benefits are intended, subject to minimum and maximum limits, to replace the lost wages of injured workers. Section 1 of HB 221 recognizes that volunteers should receive wage replacement based on the actual wages lost or the comparable wage they would receive were they paid employees rather than volunteers. Current law limits wage loss benefits for volunteer fire fighters, for example, who may have high earning capacity in their regular employment, to the benefits based on the wage paid a carrier fire fighter. House Bill 221 corrects the inequities in benefit calculations for volunteer ambulance attendants, police officers and fire fighters by calculating compensation based on the higher wage earned. Representative Hudson observed that section 2 of HB 221 will extend coverage for volunteer fire fighters. In the past year, compensation benefits for volunteer fire fighters, while engaged in fire department activities other than responding to emergencies, has been questioned. Since "employees" are covered for injuries arising out of and in the course of employment, volunteer fire fighters are similarly covered. He asserted that AS 23.30.243 has been misinterpreted to limit coverage only to those instances where the volunteer was responding to an emergency. Section 2 of HB 221 amends AS 23.30 by adding a new section that defines volunteer ambulance attendants, police officers and fire fighters as "employees." Co-Chair Larson asked how reimbursement would be determined. Representative Hudson pointed out that rates are set by formula in AS 23.31.75. The weekly rate will be based on the individuals employment. The maximum amount an individual would be reimbursed is $700 dollars. Representative Martin asked how insurance claims would be handled. Representative Hudson clarified that volunteers become temporary employees of the municipality. The municipality carries the insurance. The legislation will 8 only specify that volunteers will be compensated comparable to the full time employee. Costs will be paid by the municipality up to the cap. Representative Hudson explained that section 3 repeals AS 23.30.092. This statute has been interpreted to mean that a municipality "may" provide workers compensation coverage for volunteers. Conversely, it may be incorrectly interpreted to mean that a municipality may elect not to provide coverage. In reality, this section provides that an alternative policy may substitute for a workers' compensation policy so long as the benefits are equal or better than a statutory workers' compensation policy. However, this section has done nothing but cause confusion and I believe repealing it will clarify that all volunteers who meet the definition in AS 23.30 must be covered by workers' compensation. JOHN GEORGE, LOBBYIST, ALASKA STATE FIRE FIGHTERS ASSOCIATION stated that the employer of the volunteers' regular employment has no involvement with the insurance or injury costs incurred by a volunteer. The current level of reimbursement for volunteer injury is based on the salary of an entry level fire fighter. The maximum benefit a volunteer could be eligible for is $36,000 a year. Representative Hanley asked if a municipal fiscal note should be attached. Representative Hudson stated that, he understood that, the impact to municipalities would be insignificant. KENT SWISHER, ALASKA MUNICIPAL LEAGUE concluded that since the legislation contains maximum caps, municipalities' concerns are not severe. The Alaska Municipal League supports compensation for accidents that occur during training. Representative Grussendorf observed that municipalities would be mandated to carry workers' compensation for volunteers. Mr. George pointed out that current law requires that municipalities provide workers' compensation or another policy of equal or greater benefits. Representative Martin noted that police department and emergency medical volunteers would also be covered. Representative Foster MOVED to report HB 221 out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. HB 221 was reported out of Committee with individual 9 recommendations and with two zero fiscal notes by the Department of Administration and the Department of Labor. ADJOURNMENT The meeting adjourned at 9:54 a.m. 10