HOUSE FINANCE COMMITTEE APRIL 26, 1993 4:30 P.M. TAPE HFC 93 - 127, Side 2, #000 - end. TAPE HFC 93 - 128, Side 1, #000 - #378. CALL TO ORDER Co-Chair Ron Larson called the meeting of the House Finance Committee to order at 4:30 P.M. PRESENT Co-Chair Larson Representative Brown Co-Chair MacLean Representative Foster Vice-Chair Hanley Representative Grussendorf Representative Therriault Representative Martin Representative Navarre Representative Parnell Representative Hoffman was not present for the meeting. ALSO PRESENT Janice Adair, Assistant Commissioner, Chief Administrative Officer, Legislative Contact, Department of Environmental Conservation; Cheryl Frasca, Director, Division of Budget Review, Office of Management and Budget, Office of the Governor; Randy Gillespie, Lobbyist, AT&T, Juneau, Alaska; Ashley Reed, Lobbyist, Alascom; Mary Lou Madden, Assistant Director, Post Secondary Education, Department of Education. SUMMARY INFORMATION HB 65 An Act relating to the improvement of state finances through reduction of operating costs of certain state agencies and establishment of certain fees; and providing for an effective date. CS HB 65 (FIN) was reported out of Committee with "no recommendation" and with fiscal notes by the Department of Fish and Game, Department of Environmental Conservation, Department of Health and Social Services, Department of Administration, the Alaska Court System, Department of Labor, Department of Natural Resources, Department of Public Safety and the Department of Revenue. HOUSE BILL 65 "An Act relating to the improvement of state finances 1 through reduction of operating costs of certain state agencies and establishment of certain fees; and providing for an effective date." Co-Chair Larson MOVED that the work draft, CS HB 65 (FIN) Committee. There being NO OBJECTION, it was so ordered. Representative Therriault provided the Committee a sectional overview of the work draft. Representative Brown questioned deleting language in Section 62, regarding "hazardous waste and plans, approvals, and permits for sewage systems". JANICE ADAIR, ASSISTANT COMMISSIONER, CHIEF ADMINISTRATIVE OFFICER, LEGISLATIVE CONTACT, DEPARTMENT OF ENVIRONMENTAL CONSERVATION, explained the deletion was a technical amendment to language added to sub-paragraph (a), Page 18. The hazardous waste permits have been removed since the Department does not have the necessary statutory authority to obtain approval for hazardous waste. Representative Brown asked Section #65 repealed the outdated OPA reports. CHERYL FRASCA, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF MANAGEMENT AND BUDGET, noted Section #65 contains two repealers. One relates to OPA and the other repeals the requirement from the Department of Administration to produce monthly fund report balances. Co-Chair MacLean asked why fees were increased in Section There are eight agencies to which the increase will apply. Co-Chair MacLean provided the Committee with Amendment #1. [Attachment #1]. RANDY GILLESPIE, LOBBYIST, AT&T, JUNEAU, ALASKA, stated that AT&T has filed documents with the FCC indicating a desire to serve telephone service in the State of Alaska on a competitive basis. AT&T would object to the amendment as it extends the period of time from 90 days to 180 days for the Commission to decide if an applicant is capable to provide adequate telephone service in the State of Alaska. He thought those findings for AT&T would take much less time than that recommended in the amendment. Mr. Gillespie pointed out that the amendment has not been considered by the APUC nor has it been endorsed by any consumer groups. No related utilities have endorsed or requested the amendment, nor has it received any previous 2 public hearing. He felt it was an unfair attempt to change the competitive market. Mr. Gillespie urged the Committee not to support the amendment. Representative Navarre pointed out that Amendment #1 had failed at the subcommittee level when discussed. Mr. Gillespie explained the amendment was introduced in subcommittee although there was no testimony taken and it did fail adoption. Ms. Frasca elaborated, the Governor opposes the amendment. She stated the amendment creates new concern which have not been discussed and could jeopardize the legislation. Representative Brown noted for the record conflict as her husband is one of the APUC's Commissioners. She thought the amendment was unnecessary and that the statute should be left alone. ASHLEY REED, LOBBYIST, ALASCOM, JUNEAU, ALASKA, stated that Alascom supports the amendment. Previous to the Alascom and GCI wars, the time frame was 180 days. He added, GCI also supports the amendment. At this time, AT&T has not filed an application before the APUC for in-trust State service. He pointed out that AT&T has filed for elimination of the joint-services agreement. The agreement solicits funds from the lower forty-eight subsidizing fund rates in Alaska. These funds have made it possible to buy universal services. Representative Parnell questioned the historical perspective of the change from 180 days to 90 days. Mr. Reed stated there had been a long running battle between GCI and Alascom, and GCI had been prevented from entering the market because of the legislative fights. The year when the competition bill passed, an agreement was made between the companies. Representative Parnell asked that information be made available addressing the long term effects of the increased time. (Tape Change, HFC 93-128, Side 1). Representative Grussendorf spoke against the amendment suggesting the inappropriate time in which it was being presented to the Committee. Mr. Gillespie commented that the process has been confused. AT&T has submitted a proposal which includes reducing the long distance rates so that Alaska will be made part of West coast treatment in long distance phone calls. The proposal would benefit rural Alaska. He emphasized that if APUC had discussed the proposed amendment, AT&T would then cooperate 3 with that decision. Co-Chair Larson MOVED Amendment #1 noting it would require a title change. Representative Brown OBJECTED. A roll call was taken on the MOTION. IN FAVOR: Foster, Martin, Navarre, Larson, MacLean. OPPOSED: Therriault, Brown, Grussendorf, Hanley, Parnell. Representative Hoffman was not present for the vote. The MOTION FAILED, (5-5). MARY LOU MADDEN, ASSISTANT DIRECTOR, POST SECONDARY EDUCATION, DEPARTMENT OF EDUCATION, responded to Representative Therriault's question regarding the Family Education Loan Fund. That fund is charging an insurance fee against write offs for death and disability. The Family Education Loan has been in existence for three years and to date there have been no write offs. The guarantor of the loan is also insured. Representative Foster MOVED to report CS HB 65 (FIN) out of Committee with individual recommendations and the accompanying fiscal notes. There being NO OBJECTIONS, it was so ordered. CS HB 65 (FIN) was reported out of Committee with "no recommendations" and with fiscal notes by the Department of Fish and Game, the Department of Environmental Conservation, the Department of Health and Social Services, the Department of Administration, the Alaska Court System, the Department of Labor, the Department of Natural Resources, the Department of Public Safety and the Department of Revenue. ADJOURNMENT The meeting adjourned at 5:45 P.M. HOUSE FINANCE COMMITTEE APRIL 26, 1993 4:30 P.M. TAPE HFC 93 - 127, Side 2, #000 - end. TAPE HFC 93 - 128, Side 1, #000 - #378. CALL TO ORDER 4 Co-Chair Ron Larson called the meeting of the House Finance Committee to order at 4:30 P.M. PRESENT Co-Chair Larson Representative Brown Co-Chair MacLean Representative Foster Vice-Chair Hanley Representative Grussendorf Representative Therriault Representative Martin Representative Navarre Representative Parnell Representative Hoffman was not present for the meeting. ALSO PRESENT Janice Adair, Assistant Commissioner, Chief Administrative Officer, Legislative Contact, Department of Environmental Conservation; Cheryl Frasca, Director, Division of Budget Review, Office of Management and Budget, Office of the Governor; Randy Gillespie, Lobbyist, AT&T, Juneau, Alaska; Ashley Reed, Lobbyist, Alascom; Mary Lou Madden, Assistant Director, Post Secondary Education, Department of Education. SUMMARY INFORMATION HB 65 An Act relating to the improvement of state finances through reduction of operating costs of certain state agencies and establishment of certain fees; and providing for an effective date. CS HB 65 (FIN) was reported out of Committee with "no recommendation" and with fiscal notes by the Department of Fish and Game, Department of Environmental Conservation, Department of Health and Social Services, Department of Administration, the Alaska Court System, Department of Labor, Department of Natural Resources, Department of Public Safety and the Department of Revenue. HOUSE BILL 65 "An Act relating to the improvement of state finances through reduction of operating costs of certain state agencies and establishment of certain fees; and providing for an effective date." Co-Chair Larson MOVED that the work draft, CS HB 65 (FIN) Committee. There being NO OBJECTION, it was so ordered. Representative Therriault provided the Committee a sectional overview of the work draft. 5 Representative Brown questioned deleting language in Section 62, regarding "hazardous waste and plans, approvals, and permits for sewage systems". JANICE ADAIR, ASSISTANT COMMISSIONER, CHIEF ADMINISTRATIVE OFFICER, LEGISLATIVE CONTACT, DEPARTMENT OF ENVIRONMENTAL CONSERVATION, explained the deletion was a technical amendment to language added to sub-paragraph (a), Page 18. The hazardous waste permits have been removed since the Department does not have the necessary statutory authority to obtain approval for hazardous waste. Representative Brown asked Section #65 repealed the outdated OPA reports. CHERYL FRASCA, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF MANAGEMENT AND BUDGET, noted Section #65 contains two repealers. One relates to OPA and the other repeals the requirement from the Department of Administration to produce monthly fund report balances. Co-Chair MacLean asked why fees were increased in Section There are eight agencies to which the increase will apply. Co-Chair MacLean provided the Committee with Amendment #1. [Attachment #1]. RANDY GILLESPIE, LOBBYIST, AT&T, JUNEAU, ALASKA, stated that AT&T has filed documents with the FCC indicating a desire to serve telephone service in the State of Alaska on a competitive basis. AT&T would object to the amendment as it extends the period of time from 90 days to 180 days for the Commission to decide if an applicant is capable to provide adequate telephone service in the State of Alaska. He thought those findings for AT&T would take much less time than that recommended in the amendment. Mr. Gillespie pointed out that the amendment has not been considered by the APUC nor has it been endorsed by any consumer groups. No related utilities have endorsed or requested the amendment, nor has it received any previous public hearing. He felt it was an unfair attempt to change the competitive market. Mr. Gillespie urged the Committee not to support the amendment. Representative Navarre pointed out that Amendment #1 had failed at the subcommittee level when discussed. Mr. Gillespie explained the amendment was introduced in subcommittee although there was no testimony taken and it did fail adoption. 6 Ms. Frasca elaborated, the Governor opposes the amendment. She stated the amendment creates new concern which have not been discussed and could jeopardize the legislation. Representative Brown noted for the record conflict as her husband is one of the APUC's Commissioners. She thought the amendment was unnecessary and that the statute should be left alone. ASHLEY REED, LOBBYIST, ALASCOM, JUNEAU, ALASKA, stated that Alascom supports the amendment. Previous to the Alascom and GCI wars, the time frame was 180 days. He added, GCI also supports the amendment. At this time, AT&T has not filed an application before the APUC for in-trust State service. He pointed out that AT&T has filed for elimination of the joint-services agreement. The agreement solicits funds from the lower forty-eight subsidizing fund rates in Alaska. These funds have made it possible to buy universal services. Representative Parnell questioned the historical perspective of the change from 180 days to 90 days. Mr. Reed stated there had been a long running battle between GCI and Alascom, and GCI had been prevented from entering the market because of the legislative fights. The year when the competition bill passed, an agreement was made between the companies. Representative Parnell asked that information be made available addressing the long term effects of the increased time. (Tape Change, HFC 93-128, Side 1). Representative Grussendorf spoke against the amendment suggesting the inappropriate time in which it was being presented to the Committee. Mr. Gillespie commented that the process has been confused. AT&T has submitted a proposal which includes reducing the long distance rates so that Alaska will be made part of West coast treatment in long distance phone calls. The proposal would benefit rural Alaska. He emphasized that if APUC had discussed the proposed amendment, AT&T would then cooperate with that decision. Co-Chair Larson MOVED Amendment #1 noting it would require a title change. Representative Brown OBJECTED. A roll call was taken on the MOTION. IN FAVOR: Foster, Martin, Navarre, Larson, MacLean. 7 OPPOSED: Therriault, Brown, Grussendorf, Hanley, Parnell. Representative Hoffman was not present for the vote. The MOTION FAILED, (5-5). MARY LOU MADDEN, ASSISTANT DIRECTOR, POST SECONDARY EDUCATION, DEPARTMENT OF EDUCATION, responded to Representative Therriault's question regarding the Family Education Loan Fund. That fund is charging an insurance fee against write offs for death and disability. The Family Education Loan has been in existence for three years and to date there have been no write offs. The guarantor of the loan is also insured. Representative Foster MOVED to report CS HB 65 (FIN) out of Committee with individual recommendations and the accompanying fiscal notes. There being NO OBJECTIONS, it was so ordered. CS HB 65 (FIN) was reported out of Committee with "no recommendations" and with fiscal notes by the Department of Fish and Game, the Department of Environmental Conservation, the Department of Health and Social Services, the Department of Administration, the Alaska Court System, the Department of Labor, the Department of Natural Resources, the Department of Public Safety and the Department of Revenue. ADJOURNMENT The meeting adjourned at 5:45 P.M. 8