HOUSE FINANCE COMMITTEE April 20, 1994 8:40 A.M. TAPE HFC 94-134, Side 1, #000 - end. TAPE HFC 94-134, Side 2, #000 - end. TAPE HFC 94-135, Side 1, #000 - 177. CALL TO ORDER Co-Chair Larson called the House Finance Committee to order at 8:40 a.m. PRESENT Co-Chair Larson Representative Hoffman Co-Chair MacLean Representative Martin Vice-Chair Hanley Representative Navarre Representative Brown Representative Parnell Representative Foster Representative Therriault Representative Grussendorf ALSO PRESENT Jack Phelps, Staff, Representative Kott; Bob Poe, Director, Division of Information and Administrative Services, Department of Environmental Conservation; Greg Winegar, Department of Commerce and Economic Development; Arthur H. Snowden, II, Administrative Director, Alaska Court System; Randy Welker, Legislative Auditor, Legislative Audit Division; Alison Elgee, Director of Budget, University of Alaska; Jeff Morrison, Director, Administrative and Support Services, Department of Military and Veterans Affairs; Annette Kreitzer, Staff, Senator Leman; Bill Pop, Soldtna; Mike Conway, Director, Division of Spill Prevention and Response, Department of Environmental Conservation. SUMMARY INFORMATION SB 33 "An Act relating to grants for local emergency planning committees and emergency response organizations; and providing for an effective date." HCS CSSB 33 (FIN) was reported out of committee with "no recommendation" and with three fiscal impact notes, two by the Department of Environmental Conservation and one by the Department of Military and Veterans Affairs. SB 247 "An Act relating to state leases and to state lease-purchase and lease-financing agreements, and repealing a legislative authorization previously given for acquisition of a facility through a lease-purchase agreement; and providing for an effective date." HCS CSSB 247 (FIN) was reported out of Committee with a "do pass" recommendation and with two zero fiscal notes by the Department of Administration and the Legislative Affairs Agency. SB 251 "An Act relating to the commercial fishing revolving loan fund and the fisheries enhancement revolving loan fund." HCS CSSB 251 (FIN) was reported out of Committee with "no recommendation" and with a zero fiscal note by the Department of Commerce and Economic Development, dated 2/18/94. HB 487 "An Act relating to the sale, display, or distribution of material harmful to minors at places where minors are present or allowed to be present and where minors are able to view such material; and prohibiting the sale or display of certain audio recordings, phonograph records, magnetic tapes, compact discs, or videotapes, without warning labels and opaque wrappings." HB 487 was HELD in Committee for further discussion. SENATE BILL NO. 33 "An Act relating to grants for local emergency planning committees and emergency response organizations; and providing for an effective date." Representative Brown questioned whether the bill had sufficient public notice. Co-Chair MacLean referred to comments by the Regional Citizens' Advisory Council (RCAC). ANNETTE KREITZER, STAFF, SENATOR LEMAN maintained that the concerns of the RCAC have been addressed in SB 33. She observed that the provision for unannounced oil spill drills is still in the legislation. In response to a question by Co-Chair MacLean, Ms. Kreitzer noted that page 17, lines 7 - 8 allows the Department of Environmental Conservation, under AS 46.04.090, to set up oil and hazardous substance depots. She concluded that expenses incurred under AS 46.04.090 could be funded from the 470 Fund. Ms. Kreitzer noted that members were provided with a proposed committee substitute, work draft 8-LS0324\M, dated 4/18/94 (copy on file). She detailed changes made by the committee substitute: * "may" replaced "shall" on page 4, lines 4 and 11; "and staffed" was deleted after "depots shall be equipped", on page 4, line 14; * "identified in the local plans" was added on page 3, line 23; * Section 19 (2)(a) was reinstated on page 14; * "who, in the opinion of the governor," was added on page 6, line 24; * Representatives of the U.S. Department of Defense, Alaska Command, the Federal Emergency Management Agency, the United States Environmental Protection Agency, and the United States Coast Guard as exofficio, non voting members of the Commission; * The transition provision on page 19 was amended to clarify that the membership would change with the effective date of the committee substitute; * A new section was added on page 5, line 26 through 30, to clarify that a political subdivision is not empowered "to perform responsibilities that it is not otherwise empowered to perform." Co-Chair MacLean asked for further information regarding the fiscal notes. Representative Therriault discussed the three proposed fiscal notes. He noted that funding is being shifted from the Department of Environmental Conservation, Spill Prevention and Response component to the Information and Administrative Services component. In addition, the Department of Environmental Conservation, Information and Administrative Services is receiving $300.0 thousand dollars from the 470 Fund. He noted that the Department requested $111.8 thousand dollars in increased general fund dollars to pay for the administrative cost of the program. The request was refused. He stressed that the Department will have to decide if they wish to use increased 470 Fund money for administration or increased grants. Funding for the Department of Military and Veterans Affairs will be through a RSA from the Department of Environmental Conservation, Information and Administrative Services. BOB POE, DIRECTOR, DIVISION OF INFORMATION AND ADMINISTRATIVE SERVICES, DEPARTMENT OF ENVIRONMENTAL CONSERVATION agreed that the Response Fund Administration component will be responsible for the RSA's. He noted that there will be an increase in the RSA amount. He clarified that $646.7 thousand dollars will be transferred to the Department of Military and Veterans Affairs through the Department of Environmental Conservation. JEFF MORRISON, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF MILITARY AND VETERANS' AFFAIRS explained the Department of Military and Veterans' Affairs fiscal note. He clarified that funding identified in FY 95 continues as part of the base. He noted that funding would change in FY 2000 to reflect a reduction of $111.8 thousand dollars. Representative Martin MOVED to ADOPT work draft 8-LS0324\M, dated 4/18/94. There being NO OBJECTION, it was so ordered. Representative Therriault provided members with AMENDMENT 1 (copy on file). Representative Therriault MOVED to ADOPT AMENDMENT 1. He explained that Amendment 1 would delete "and" to allow the Department of Military and Veterans' Affairs to receive funding through the Department of Environmental Conservation for the cost of preparing or responding to requests. There being NO OBJECTION, it was so ordered. Representative Brown provided members with AMENDMENT 2 (copy on file). She explained that the amendment would insert "and all emergency plans prepared by state agencies under other authorities." She noted that plans in the Department of Natural Resources would be included by the amendment. Ms. Kreitzer suggested that the amendment is unnecessary. She referred to language on page 7, line 13. MIKE CONWAY, DIRECTOR, DIVISION OF SPILL PREVENTION AND RESPONSE spoke in support of Amendment 2. He noted that a disaster could require that issues not in the Division's program be addressed. Representative Hanley noted that Amendment 2 would expand the scope of the Division's review. Ms. Kreitzer stressed that implementation of page 7, line 13 is not restricted to AS 46. She noted that the Division would have to prioritize its resources. Co-Chair MacLean suggested that "prepared by state agencies under other authority" be inserted after "plans" on page 7, line 14. Representative Brown spoke in support of Amendmet 2. She discussed funding from the 470 Fund. She noted that areas outside of the scope of the 470 fund would be involved. She emphasized that there is enough demand for funding of activities within the scope of the Fund for her to be comfortable with the fiscal notes as presented. Mr. Conway expressed support for Co-Chair MacLean's suggestion. He clarified that federal plans would not be effected by the amendment. Co-Chair MacLean MOVED to AMEND Amendment 2 to insert "prepared by state agencies under other authority" after "plans" on page 7, line 14 and on page 12, line 16. There being NO OBJECTION, it was so ordered. Representative Brown MOVED to ADOPT AMENDMENT 2 as amended. Representative Martin OBJECTED. A roll call vote was taken on the motion. IN FAVOR: Hanley, Navarre, Therriault, Brown, Larson, MacLean OPPOSED: Martin, Parnell, Foster Representatives Hoffman and Grussendorf were not present for the vote. The MOTION PASSED (6-3). Co-Chair MacLean MOVED to report HCS CSSB 33 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. HCS CSSB 33 (FIN) was reported out of committee with "no recommendation" and with three fiscal impact notes, two by the Department of Environmental Conservation and one by the Department of Military and Veterans Affairs. SENATE BILL NO. 251 "An Act relating to the commercial fishing revolving loan fund and the fisheries enhancement revolving loan fund." Co-Chair Larson noted that SB 251 was held pending a motion to move the bill from Committee. Representative Navarre stated that his concerns in regards to the constitutionality of the bill had been allayed. Co-Chair MacLean expressed her desire to reconsider Amendment l to SB 251. Representative Foster WITHDREW his motion to move the bill from Committee. There being NO OBJECTION, it was so ordered. Co-Chair MacLean MOVED to RESCIND the Committee's action in failing to adopt Amendment 1. Amendment 1 deletes "one-half of" on page 6, line 8. She explained that the fifty percent provision was not included in the original version of the bill. She emphasized that hatchery loans would be last on the priority list. She stressed that surplus funds should be available for hatchery loans. GREG WINEGAR, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT explained, in response to questions by members, that the amendment would not adversely effect the Commercial Fishing Fund. The Department of Commerce and Economic Development supports the amendment. He stressed that section 8 places conditions on the use of funds. The department would have to consult with the regional planning team, demonstrate a significant contribution to the common property fisheries, operate the hatchery in a manner beneficial to the public interest and be financially viable. Representative Hanley noted that the Commissioner is being given the authority to expand the program. (Tape Change, HFC 94-134, Side 2) Representative Hanley noted that the excess funds will not be available for use as general fund dollars. Representative Navarre maintained that the legislature can control approprition to the loan fund on an annual basis. There being NO OBJECTION, the Committee's action in failing to adopt Amendment 1 was RESCINDED. Co-Chair MacLean MOVED to ADOPT AMENDMENT 1. Representative Hanley OBJECTED. A roll call vote was taken on the motion IN FAVOR: Martin, Navarre, Brown, Grussendorf, Larson, MacLean OPPOSED: Hanley, Therriault, Parnell, Foster Representative Hoffman was not present for the vote. The MOTION PASSED (6-4). Representative Hanley MOVED to report HCS CSSB 251 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. HCS CSSB 251 (FIN) was reported out of Committee with "no recommendation" and with a zero fiscal note by the Department of Commerce and Economic Development, DATED 2/18/94. SENATE BILL NO. 247 "An Act relating to state leases and to state lease-purchase and lease-financing agreements, and repealing a legislative authorization previously given for acquisition of a facility through a lease-purchase agreement; and providing for an effective date." ARTHUR H. SNOWDEN, II, ADMINISTRATIVE DIRECTOR, ALASKA COURT SYSTEM provided members with information regarding state acquisition of the Anchorage Times Building (copy on file). He noted that an appraiser estimated that the state could save $3.7 to $4.0 million dollars by the purchase. In order to complete the purchase the effective date on the bill as it relates to the Alaska Court System would have to be moved. He noted that the members have received a committee substitute, work draft, 8-LS1447\I, dated 4/19/94 (copy on file). He stated that the committee substitute would change the effective date to allow sufficient time to complete the purchase. He assured members that no other purchases are anticipated. RANDY WELKER, LEGISLATIVE AUDITOR, LEGISLATIVE AUDIT DIVISION testified that the Legislative Budget and Audit Committee has been concerned about several lease purchases that have occurred in the recent past. He explained that the legislation would require that all branches of government obtain prior, specific, legislative approval, by law, to proceed with lease purchases. He observed that the legislation lowers the threshold whereby agencies must give notice to the legislature to enter or renew leases. Representative Martin expressed concern with the extension of legislative authority. Mr. Welker stressed that the language clarifies rather than expands authority. He noted that lease purchase statutes require that the Legislative Budget and Audit Committee, Legislative Council and the judicial branch give notice to the full legislature that they intend to enter into a lease purchase. The statute would be amended to add the requirment of legislative approval. He acknowledged that the legislation further limits the authority of the Legislative Council. Co-Chair Larson MOVED to ADOPT work draft, 8-LS1447\I, dated 4/19/94. There being NO OBJECTION, it was so ordered. Co-Chair MacLean MOVED to ADOPT AMENDMENT 1 (copy on file). She explained that the amendment would add a repealer. The repealer was included in other versions of the bill. It would repeal authorization for a Fairbanks court house given in 1986. She stressed that it is the only outdated lease purchase authorization. Mr. Snowden spoke against Amendment 1. He stressed that the legislature would have to approve funding for design and engineering before a lease purchase could take place. He added that the need for a Fairbanks court house exists. He reiterated that the Alaska Court System would seek approval for design and engineering before a lease purchase would take place in Fairbanks. Representative Hanley noted that some lease purchases were completed through certificates of participation between two agencies. Mr. Snowden emphasized that before he could enter into a certificate of participation the building price would have to ascertained. He stressed that before the building price was ascertained he would need to seek funding from the legislature for design and engineering. A roll call vote was taken on the motion to adopt AMENDMENT 1. IN FAVOR: Martin, Parnell, Hanley, MacLean, Larson OPPOSED: Navarre, Therriault, Brown, Grussendorf Representatives Foster and Hoffman were not present for the vote. The MOTION PASSED (5-4). Co-Chair Larson provided members with AMENDMENT 2 (copy on file). He explained that the amendment would add the following language: "The Board of Regents may, when leases are to be paid for with federal grant funds, recovery of indirect costs of university activities, or other university receipts as defined by AS 14.40.491, and grant or other commitment is firm for two years or less, enter into a lease with an initial term equal to the term of the firm commitment, and with optional renewal periods for up to five years." Mr. Welker clarified that all receipts of the University other than general fund money is included under AS 14.40.491. ALISON ELGEE, DIRECTOR OF BUDGET, UNIVERSITY OF ALASKA explained that all non-federal contract work is accounted for under university receipts. She explained that the University of Alaska frequently receives federal or other contracts with a one year firm commitment that could potentially be extended for several years. As written, SB 247 presently limits the University to a one year lease, with a one year renewal option. The amendment would allow up to five one year renewal options. She emphasized that if the market declines the University would rebid the lease. In response to a question by Representative Hanley, Ms. Elgee clarified that student fees are a separate category not included in university receipts under AS 14. There being NO OBJECTION, AMENDMENT 2 was ADOPTED. Representative Navarre noted that the only change in HCS CSSB 247 (FIN) is section 12. Mr. Welker noted that he had no objection to section 12, which extends the effective date for the Anchorage court house lease purchase. In response to a question by Representative Martin, Mr. Welker reiterated that any lease that exceeds $500.0 thousand dollars or is 2.5 percent over the term must be approved by the legislature. Only new leases would be effected. Co-Chair MacLean MOVED to report HCS CSSB 247 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. HCS CSSB 247 (FIN) was reported out of Committee with a "do pass" recommendation and with two zero fiscal notes by the Department of Administration and the Legislative Affairs Agency. HOUSE BILL NO. 487 "An Act relating to the sale, display, or distribution of material harmful to minors at places where minors are present or allowed to be present and where minors are able to view such material; and prohibiting the sale or display of certain audio recordings, phonograph records, magnetic tapes, compact discs, or videotapes, without warning labels and opaque wrappings." JACK PHELPS, STAFF, REPRESENTATIVE PETE KOTT spoke on behalf of HB 487. He stated that the purpose of the legislation is to reduce the unwanted exposure of minors to obscene material. He noted that the bill was based on the Supreme Court decision Miller versus California which defines ~'obscenity." He asserted that the legislation does not impact first amendment rights. The bill would make it illegal to sell or rent obscene material to minors. The legislation requires that adult obscene material be covered or placed behind blinder racks. In response to a question by Representative Navarre, Mr. Phelps clarified that obscene music would be effected. Representative Navarre referred to page 1, line 12 through 14. He asked if the "average adult person" and "contemporary community standards" are defined in statute. Mr. Phelps stated that "contemporary community standards" is defined as "prevailing in the state as a whole." He stressed that the language was developed by the United States Supreme Court. Co-Chair MacLean asked who decides if "material lacks serious literary, scientific, educational, artistic, or political value for minors." She asked if the Old Testament would be censored since it depicts naked persons. She asked the meaning on page 3, line 24, for male genitals to be covered in a discernible turgid state. BILL POPS, SOLDTNA testified via the teleconference network in opposition to HB 487. He expressed concern with who would make decisions in regards to contemporary community standards. He questioned if first amendment rights would be violated. He owns a music and bookstore. He stressed that it would be impossible for him to preview every piece of literature or music sold by his store. He urged the Committee to not pass HB 487. In response to a question by Representative Therriault, Mr. Pops suggested the legislation would be improved if it were narrowed to target adult magazines and movies. In response to a question by Representative Martin, Mr. Pops clarified that his major concern is in regards to page 3, section 1. Representative Brown objected to the legislation based on freedom of speech concerns. (Tape Change, HFC 94-135, Side 1) Representative Therriault MOVED to AMEND HB 487 on page 3, line 19 to delete "record, compact disc and recording tape." Representative Therriault explained that the amendment was offered to narrow the scope. He felt that adult magazines and videos should be kept out of the reach of children. Representative Navarre wondered if "video" should also be deleted. He suggested that the legislation could be amended to require sexually explicit video tapes to be kept in a separate section. He stressed the difficulty in categorizing videos. Mr. Phelps pointed out that the legislation provides that the person must knowingly sale, rent, or display items covered by the definition. He stressed the definition of obscenity has been approved by the Supreme Court. He emphasized that the U.S. Supreme Court has said that obscene material does not fall under the protection of the first amendment. He noted that Anchorage has a similar ordinance. Representative Martin OBJECTED to the motion to amend HB 487. A roll call vote was taken on the motion. IN FAVOR: Brown, Hanley, Grussendorf, Navarre, Parnell, Therriault, MacLean, Larson OPPOSED: Martin Representative Hoffman was not present for the vote. The MOTION PASSED (8-1). Representative Brown MOVED to TABLE CSHB 487 (FIN). Representative Therriault OBJECTED. A roll call vote was taken on the motion. IN FAVOR: Brown, Grussendorf, Navarre, MacLean OPPOSED: Hanley, Martin, Parnell, Therriault Representative Hoffman was not present for the vote. The MOTION FAILED (4-5). Co-Chair MacLean spoke in opposition to CSHB 487 (FIN). Representative Therriault MOVED to report CSHB 487 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. Co-Chair MacLean OBJECTED. Representative Navarre spoke against moving the bill from Committee. He stressed that the legislation needs work. He maintained that the legislation makes sweeping changes with unknown consequences. A roll call vote was taken on the motion. IN FAVOR: Hanley, Martin, Parnell, Therriault OPPOSED: Brown, Grussendorf, Navarre, MacLean Representative Hoffman was not present for the vote. The MOTION FAILED (4-5). Representative Navarre MOVED to RESCIND the Committee's action in failing to move CSHB 487 (FIN) from Committee. A roll call vote was taken on the motion. IN FAVOR: Brown, Grussendorf, MacLean, Larson OPPOSED: Hanley, Martin, Navarre, Parnell, Therriault Representative Hoffman was not present for the vote. The MOTION FAILED (4-5). ADJOURNMENT The meeting adjourned at 10:20 a.m.