HOUSE FINANCE COMMITTEE APRIL 26, 1995 1:50 P.M. TAPE HFC 95 - 99, Side 2, #000 - end. TAPE HFC 95 - 100, Side 1, #000 - end. TAPE HFC 95 - 100, Side 2, #000 - end. TAPE HFC 95 - 101, Side 1, #000 - #486. CALL TO ORDER Co-Chair Mark Hanley called the House Finance Committee meeting to order at 1:50 P.M. PRESENT Co-Chair Hanley Representative Kohring Co-Chair Foster Representative Martin Representative Mulder Representative Navarre Representative Brown Representative Parnell Representative Grussendorf Representative Therriault Representative Kelly ALSO PRESENT H. Pat Ladner, Executive Director, Alaska Aerospace Development Corporation, Anchorage; Arliss Sturgulewski, (Testified via Teleconference), Interim Executive Director, Alaska Science & Technology Foundation, Anchorage; Thomas Wright, Staff to Representative Ivan Ivan; Representative Brian Porter; Del Smith, Deputy Commissioner, Department of Public Safety; Margo Knuth, Assistant Attorney General, Criminal Division, Department of Law; Jerry Shriner, Special Assistant, Office of the Commissioner, Department of Corrections; Loren Jones, Director, Division of Alcoholism & Drug Abuse, Department of Health and Social Services; Pam Neal, President, Alaska State Chamber of Commerce; Deborah Behr, Regulations Attorney, Department of Law; Deena Henkins, Section Chief, Drinking Water & Wastewater, Department of Environmental Conservation; Bruce Campbell, Staff to Representative Pete Kelly; John Lindback, Chief of Staff, Office of the Lt. Governor; Elmer Lindstrom, Special Assistant to the Commissioner, Department of Health and Social Services; Mike Corhill, (Testified via teleconference), President, Alaska Peace Officer Association, Anchorage. SUMMARY HB 315 An Act relating to the financing of technological 1 developments by public corporations of the state; and relating to the financing of the Kodiak launch complex, the Fairbanks satellite ground station space park, and a low-rank coal water fuel technology project. CS HB 315 (FIN) was reported out of Committee with "individual recommendations" and with a zero fiscal note by the Department of Commerce and Economic Development dated 4/20/95. HB 269 An Act relating to credits against certain taxes for contributions to certain public educational radio and television networks and stations and to endowments for public educational radio and television networks; and providing for an effective date. CS HB 269 (FIN) was reported out of Committee with a "no recommendation" and with a zero fiscal note by the Department of Revenue dated 4/3/95. HB 159 An Act allowing a person under age 21 to be arrested by a peace officer without a warrant for illegal possession, consumption, or control of alcohol; relating to the offenses of driving with a revoked license, driving while intoxicated, or failure to submit to a chemical test of breath or blood; and providing for an effective date. CS HB 159 (JUD) was reported out of Committee with a "no recommendation" and with fiscal notes by the Department of Administration, the Department of Public Safety dated 3/29/95, the Alaska Court System dated 3/29/95, the Department of Corrections dated 3/29/95 and the Department of Law dated 3/29/95. HB 130 An Act relating to agency review of public comment on the adoption, amendment, and repeal of regulations; relating to the examination of proposed regulations, amendments of regulations, and orders repealing regulations by the Administrative Regulation Review Committee and the Department of Law; relating to the submission to, and acceptance by, the lieutenant governor of proposed regulations, amendments of regulations, and orders repealing regulations; and requiring agencies to make certain determinations before adopting regulations, amendments of regulations, or orders repealing regulations. 2 HB 130 was HELD in Committee for further consideration. HOUSE BILL 315 "An Act relating to the financing of technological developments by public corporations of the state; and relating to the financing of the Kodiak launch complex, the Fairbanks satellite ground station space park, and a low-rank coal water fuel technology project." ARLISS STURGULEWSKI, (TESTIFIED VIA TELECONFERENCE), INTERIM EXECUTIVE DIRECTOR, ALASKA SCIENCE & TECHNOLOGY FOUNDATION, ANCHORAGE, provided Committee members with a memorandum dated 4/26/95 regarding the "Budget Information Requested". [Attachment #1]. She offered to answer questions from the Committee. Representative Navarre questioned how the interest of the fund would be protected. Representative Brown referenced Section #6 and asked if award money would result from the interest of the foundation or from the principle. Ms. Sturgulewski explained that the coal water fuel proposal would be phased over a three year period originating from a grant line. If Phase 2 of the project is accepted, the first payment would be made this fiscal year. Ms. Sturgulewski referenced Attachment #1, pointing out that the analysis would remove the University Agriculture Station and the Aerospace Development Corporation. Representative Brown questioned why the earnings listed on Attachment #1 were greater without the inclusion of coal. Ms. Sturgulewski indicated that those earning would amount to $7.2 million dollars. Discussion followed between Representative Brown and Ms. Sturgulewski regarding the estimated earning reserve payments. Representative Navarre recommended removing the agriculture component and then focusing the availability of that grant money to other projects. Representative Martin thought that Business and Industrial Development Corporations and Organizations (BIDCO) made a commitment to support the Alaska Science and Technology Foundation. Ms. Sturgulewski responded that a BIDCO package has been submitted. The return should be available on May 15th, 1995. Representative Martin asked how many projects would be eliminated with the advance of aerospace. Senator Sturgulewski replied that aerospace would move forward only if appropriate funding was available. She emphasized that this was not an appropriation bill. Representative Martin stressed his concerns with future complications resulting 3 from the legislation. Ms. Sturgulewski responded that the foundation currently handles many small grants and that the board of directors will continue to serve the needs of the small grant community. Ms. Sturgulewski explained that the cold water fuels and royalties plan bids should arrive soon. The repayments for the Science and Tech Foundation and the Department of Education will come from royalties received on commercial sales and from licensing of that technology. Repayments will then become a portion of the negotiation, which must begin in order that Phase 2 can start. Representative Brown asked if satellite facilities are commercially viable. Ms. Sturgulewski stated that there are private interests from business and that it is anticipated that the operation would allow for significant private sector information. She added that the investment of the project is under review from Alaska Industrial Development Export Authority (AIDEA). Representative Brown questioned if that was the normal sequence of events in obtaining AIDEA bonding. H. PAT LADNER, EXECUTIVE DIRECTOR, ALASKA AEROSPACE DEVELOPMENT CORPORATION (AADC), ANCHORAGE, explained that was an appropriate procedure and noted that the proposed legislation would provide Alaska the opportunity to enter into a new industry without placing money at risk. Representative Martin MOVED to adopt Amendment #1. Representative Mulder OBJECTED. Representative Martin stressed that free enterprise should "pay" their own way. Representative Kelly advised that the legislation would be for the benefit of the entire State, agreeing that the 50% application would not be appropriate. Representative Therriault stated that fees would be paid for by the debt service, and noted that the enterprise would be responsible for more than 50%. Representative Mulder added that there would be a financial return through AIDEA and said that this would be a good project. Representative Martin emphasized that the Kodiak launch complex, the Fairbanks satellite ground space park and the low rank coal water fuel technology should be able to accumulate the remaining funds through a private match. Ms. Sturgulewski responded to Representative Brown's questioned regarding the coal water fuel project stating that the major amount of money would be received from the U.S. Department of Energy and would not be private funds. 4 The Alaska Science & Technology Foundation will contribute $3.7 million dollars and the Department of Energy will contribute $17 million dollars for the demonstration of the project. She pointed out that the language of the amendment would make receiving that contribution difficult. Representative Brown referenced a letter from Mr. Snell at AIDEA dated 3/7/95 explaining the anticipated $10.2 million to be received from the federal government and $8 million to be received from the consortium members in order to begin Phase 2. The intention would be for the $4 million state dollars to be spent up-front in order to provide the preliminary study before the other participants provide their money. Ms. Sturgulewski stated that all phases are being worked on together, while indicating that her agency has clarified that the pay back project would need to occur in the first three years. Ms. Sturgulewski stated that Phase 1 has been completed. Phase 2 has not been entered into yet. Representative Brown advised that Representative Martin's amendment would not conflict with the foundation's intention. Ms. Sturgulewski disagreed stating that it would conflict with the amount of money originating from the grant and the Department of Energy. Representative Brown asked if the legislation would affect the Healy Claim Coal Project. Ms. Sturgulewski remarked that the legislation would affect the tide waters demonstration project on the beach. There are a number of ownerships involved with the coal fields and she added, that group was interested and would be participating in the project. A roll call was taken on the MOTION. IN FAVOR: Brown, Martin OPPOSED: Grussendorf, Kelly, Kohring, Mulder, Navarre, Therriault, Hanley, Foster Representative Parnell was not present for the vote. The MOTION FAILED (2-8). Representative Navarre explained Amendment #2. [Attachment of Alaska to participate in the challenger learning center feasibility study. This study would provide a computer program and would establish a learning center addressing interests in space industry technology. He pointed out that Kenai had been listed because the Mayor of Kenai offered to donate the land for that purpose. He agreed that Anchorage would be a more accessible area. 5 Co-Chair Hanley asked if there was a cost associated with the feasibility study. Representative Navarre commented that a cost had not yet been established although he recommended providing a cap limit to those costs. Mr. Ladner elaborated that he had spoken to AIDEA regarding the feasibility study and that a capital budget submission has been completed between Alaska Aerospace and AIDEA. (Tape Change, HFC 95-100, Side 1). Ms. Ladner reiterated that this would be a good program resulting in positive impacts on children who use the center in the math and science areas. Mr. Ladner noted that he supported Amendment #2. He added that the cost to engage in the proposal would be $700 thousand dollars and would be an on-going cost. Representative Mulder asked the cost to provide the feasibility study. Mr. Ladner replied that it had not yet been submitted and that to date determining those costs had been an explorative exercise of the corporation. Co-Chair Hanley suggested including a regional consideration on the amendment. Representative Navarre agreed to amending the amendment to include "other locations". Representative Navarre recommended changing the language in the lower section of the bill deleting "one-quarter" and inserting "one-half". Representative Navarre amended the amendment to Line 17, changing the language to read "(1) one-half by the Alaska Aerospace Development Corporation and AIDEA". Co-Chair Hanley added a "friendly" amendment to the amendment by deleting the language on Line 15 "Kenai and". Representative Navarre MOVED to adopt the amended Amendment Representative Mulder MOVED to report CS HB 315 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. Representative Martin OBJECTED. A roll call was taken on the MOTION. IN FAVOR: Grussendorf, Kelly, Kohring, Mulder, Navarre, Parnell, Therriault, Foster, Hanley OPPOSED: Martin Representative Brown was not present for the vote. The MOTION PASSED (9-1). 6 CS HB 315 (FIN) was reported out of Committee with "individual recommendations" and with a zero fiscal note by the Department of Commerce and Economic Development dated 4/20/95. HOUSE BILL 269 "An Act relating to credits against certain taxes for contributions to certain public educational radio and television networks and stations and to endowments for public educational radio and television networks; and providing for an effective date." Representative Navarre MOVED to adopt Amendment #3. [Attachment #3]. He stated that Amendment #3 would add in a fisheries landing tax while also would change the provisions to be taken half from the state share and half from the municipality share. The amendment would also add a sunset implemented at the end of five years. There being NO OBJECTION, it was adopted. THOMAS WRIGHT, STAFF TO REPRESENTATIVE IVAN IVAN, noted that Representative Ivan prepared an amendment which would add technical language to Page 2, Line 30, deleting the word "and" which would make it consistent with other chapters. Representative Grussendorf MOVED to adopt Amendment #4. [Attachment #4]. There being NO OBJECTION, it was adopted. Representative Mulder MOVED to report CS HB 269 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. Representative Kohring OBJECTED for purposes of discussion. He asked where the funds would be directed. Mr. Wright responded that decision would be up to the contributor, although, with the members on the endowment trust there would be a strong push to donate to that trust for the interest in building funds to alleviate the State's responsibility for public broadcasting. Donations will not be prohibited directly to specific stations. Representative Kohring noted that the endowment trust was not a State operation or function. He asked if it was legal for the State to provide a tax credit which funds a private entity. Mr. Wright did not know. He recommended that question be directed to the Department of Revenue. Representative Kohring interjected that a precedent could be established for other private organization to request funding. Representative Kohring WITHDREW THE OBJECTION. There being NO OBJECTIONS, it so ordered. 7 CS HB 269 (FIN) was reported out of Committee with "no recommendation" and with a zero fiscal note by the Department of Revenue. HOUSE BILL 159 "An Act allowing a person under age 21 to be arrested by a peace officer without a warrant for illegal possession, consumption, or control of alcohol; relating to the offenses of driving with a revoked license, driving while intoxicated, or failure to submit to a chemical test of breath or blood; and providing for an effective date." REPRESENTATIVE BRIAN PORTER testified in support of HB 159 noting that it would allow the court the option of ordering a person to take Antibes or a similar drug as a condition of parole or probation. Also, the bill would require a person convicted of a felony Driving While Intoxicated (DWI) to be evaluated by an alcohol screening agency before that person is sentenced. Additionally, the legislation would allow the court to impose suspended jail time on a person convicted of a felony DWI, who fails to complete the alcohol treatment ordered by the court. Representative Porter distributed to Committee members a handout titled "Impaired Driving Assessment". [Attachment #5]. Representative Porter emphasized that the most frequent violent crime in the country is drunk driving. A study published by the Alaska Department of Transportation and Public Facilities (DOTPF) stated that alcohol was a factor in 982 accidents statewide in 1993. He added that repeat offenders account for a disproportionate number of fatal accidents. In fatal accidents in which the driver is drunk, those persons with a prior conviction for drunk driving would be five times more likely to be involved than that person with no record. Representative Porter concluded, driving is a privilege, not a right! HB 159 would give Alaska one of the toughest drunk driving statutes in the nation and the legislation would send a clear message that Alaskans will no longer tolerate persons who drive drunk. Representative Porter requested that Section #1 which would allow a person under the age 21 to be arrested by a peace officer, without a warrant, for illegal possession, consumption, or control of an alcoholic beverage and Section ignition interlock device as a part of a fine imposed for convictions of driving while intoxicated or refusal to take 8 a breath test, to remain in the legislation if changes are made. MARGO KNUTH, ASSISTANT ATTORNEY GENERAL, CRIMINAL DIVISION, DEPARTMENT OF LAW, commented that the current Administration supports getting tough on drunk drivers, although, she noted two troublesome sections of the legislation. The first area of concern would be the fiscal impact. Felony case costs are much more to prosecute than misdemeanors. Each case would be required to go to the grand jury. Ms. Knuth noted that there would be 300 to 400 hundred persons each year who would qualify for DWI treatment. She added, that because of felony sanctions, defendants who are accused of felonies more often go to trial than they would on a misdemeanor. For that reason, the Department has submitted fiscal notes requesting four new positions. Ms. Knuth added that the legislation would establish what sentences should be imposed for a felony offense. For the first felony offense, the court would impose a sentence of (120) one hundred twenty days, whereas, for second felony offense, the sentence would be (240) two hundred forty days, and the third sentence would be (360) three hundred sixty days. The Legislature has adopted presumptive sentencing for felony cases. She stressed that the costs associated with the legislation would be significant. MIKE CORHILL, (TESTIFIED VIA TELECONFERENCE), PRESIDENT, ALASKA PEACE OFFICER ASSOCIATION, ANCHORAGE, spoke in support of the legislation. He stated that the Alaska Peace Officer Association believes that a harsher way in dealing with drunk drivers should be implemented. Mr. Corhill reflected on the seriousness of the problem and recommended that the situation be handled criminally. He thought that a Class "C" felony would serve as a deterrent factor to the current crime associated with drinking. Representative Martin asked which section of the legislation would ease the concerns for the Department of Law. Ms. Knuth stated that Section #7 of the bill contains a provision which makes the third and subsequent offenses a felony. Sections (1), (a)(b) & (c), specifies a sentence that is less than what presumptive sentencing requires. Representative Martin asked if problems with the persons individual rights could occur in that section of the legislation dealing with the breath test. Ms. Knuth responded that Alaska was the first State to specify that a blood sample could not be taken from someone suspected of drunk driving. The courts have allowed, as an alternative, the same sanction as if a person were found to be a drunk driver. Ms. Knuth pointed out that law had been challenged and was upheld. 9 JERRY SHRINER, SPECIAL ASSISTANT, OFFICE OF THE COMMISSIONER, DEPARTMENT OF CORRECTIONS, stated that the Department does not oppose the legislation although emphasized that the fiscal impact would be significant. To raise the offense from a misdemeanor to a felony would require the Department to supervise and write court reports on a group of people not currently being supervised. He emphasized that passage of the legislation would require absolute funding. Representative Martin asked if the Department could refer the person to a detox center. Mr. Shriner advised that the Department of Corrections does not have that flexibility. Ms. Knuth interjected that there are inpatient programs which count the same as jail time because they create such an imposition on the persons freedom. (Tape Change, HFC 95-100, Side 2). LOREN JONES, DIRECTOR, DIVISION OF ALCOHOLISM & DRUG ABUSE, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, stated that the Department had concerns with Section #7. He pointed out that as part of the imposition of sentence, the court would be allowed to order, as a condition of parole, that an individual take a drug or combination of drugs which would then prevent the consumption of alcohol. He explained that not everyone would be physically capable of taking the recommended drug Antibuse. Research has shown that the drug only works well when the client is monitored in a treatment program. DEL SMITH, DEPUTY COMMISSIONER, DEPARTMENT OF PUBLIC SAFETY, noted that the Department would be supportive of any effort to remove drunken drivers off the highways, although pointed out the fiscal impact costs associated with the potential jail sentences, resulting in court trial overtime. Representative Brown asked if the current planned enhancements would address information resulting from prior DWI's. Ms. Knuth replied that it would be difficult to determine which DWI offense would be for the offense that person committed in determining sentencing. Representative Brown inquired if the $1.8 million dollar fiscal impact would equal the benefit in safety provided by the legislation. Mr. Smith advised that it is important for public safety to get drunk drivers off the road. Discussion followed among Committee members regarding the fiscal cost and the safety that would be potentially provided through the legislation. 10 Representative Martin MOVED to report CS HB 159 (JUD) out of Committee with individual recommendations. There being NO OBJECTION, it was so ordered. CS HB 159 (JUD) was reported out of Committee with "no recommendations" and with fiscal notes by the Department of Administration, the Department of Public Safety dated 3/29/95, the Alaska Court System dated 3/29/95, the Department of Corrections dated 3/29/95 and the Department of Law dated 3/29/95. HOUSE BILL 130 "An Act relating to agency review of public comment on the adoption, amendment, and repeal of regulations; relating to the examination of proposed regulations, amendments of regulations, and orders repealing regulations by the Administrative Regulation Review Committee and the Department of Law; relating to the submission to, and acceptance by, the lieutenant governor of proposed regulations, amendments of regulations, and orders repealing regulations; and requiring agencies to make certain determinations before adopting regulations, amendments of regulations, or orders repealing regulations." Representative Kelly explained HB 130. He noted that the creation of regulations heretofore has been carried out within the bureaus of state government beyond the light of public scrutiny. He noted that though public input has always been a part of the regulation process, the system is inherently flawed. Regulations have the force of law, but he thought in our form of government law must emanate from the people through their elected officials. Representative Kelly continued, in the current system, unelected regulation writers have the last word in the process, not the people. HB 130 would attempt to remedy that by bringing elected officials back into the loop and making them politically accountable to the people for the regulations that impact their lives. The legislation would begin the process of regulatory reform. Representative Kelly provided Committee members a sectional analysis of the proposed legislation. PAM NEAL, PRESIDENT, ALASKA STATE CHAMBER OF COMMERCE, testified in support of HB 130. She pointed out that regulatory reform was a priority of the State Chamber of Commerce this year. DEBORAH BEHR, REGULATIONS ATTORNEY, DEPARTMENT OF LAW, 11 provided a review of HB 130. She pointed out that the Administration was "neutral" on the bill, although the Lt. Governor's Office is supportive of legislative reform. She noted that the amendment she provided to the sponsor [Attachment #6] would address the Department's concerns regarding the applicability for regulations. Ms. Behr noted that the bill would not provide any dramatic changes to the current system. The Governor currently has the authority to return regulations to the individual department commissioners. Ms. Behr thought that the legislation would well address the cost of compliance. Representative Brown asked how an agency would be able to adopt regulations without receiving public comment. Ms. Behr responded that each department would meet with their individual commissioners and at that time, the commissioner would be briefed. Following passage of the legislation, those meetings would be mandated. (Tape Change, HFC 95-101, Side 1). DEENA HENKINS, SECTION CHIEF, DRINKING WATER AND WASTEWATER, DEPARTMENT OF ENVIRONMENTAL CONSERVATION, explained that the Department has a great deal of experience in compiling comments and providing a written response to those comments. A number of standards are covered by the federal public participation in regulations which requires a written response to comments. She indicated that depending on the complexity and controversy of the regulations, the process would range in cost from several thousand dollars to ten thousand dollars. The process also can take a substantial amount of time to compile which would then cause problems meeting deadlines. JOHN LINDBACK, CHIEF OF STAFF, OFFICE OF THE LT. GOVERNOR, reiterated that the Administration is neutral on the legislation, and would look forward to including the legislation with other regulatory reform bills which have been proposed this session. He added that the Administration is interested in the regulatory reform, thus building a consensus to the process. The Lt. Governor has indicated that the legislation would reflect how public perception currently exists on the process. He pointed out that most people assume that this power is current law. Mr. Lindback then addressed the fiscal notes. He enumerated that amendments to the bill most often have a cost associated with them. He asked that the fiscal notes from each agency adequately reflect the action of the Legislature. Representative Brown asked the amount of time needed for a 12 review. Mr. Lindback agreed that implementation could be a potential problem. He thought that it would work better if a position was assigned specifically to follow the regulations. That position would be responsible to follow all regulations throughout the legislature and know their impact during that process. Representative Mulder asked if there was any portion of the legislation that the Administration found objectional. Mr. Lindback reiterated that the Administration was neutral on the legislation. Representative Kohring asked what would happen if a regulation was turned down by the Governor. Representative Kelly explained that then the comments from the Legislative Review Committee would go to the Governor. Under the proposed legislation, the Legislative Review Committee would be brought into the loop sooner. Representative Kelly responded to Representative Brown's inquiry about the intention to cost. He added that industry has requested for regulation writers to make a determination of the cost for compliance. He indicated that would be very expensive and that the intention during the public process period, was to have the regulation writers address the cost of those regulations. He noted that he would prefer a complete "cost of analysis" for the regulations although stated that resources are limited. Representative Brown asked how the language would affect each department's ability to raise their fees. Mr. Lindback acknowledged that the legislation would clarify that there would be a cost to each private person. Representative Brown voiced her concerns regarding the cost versus the benefits of the legislation. BRUCE CAMPBELL, STAFF, REPRESENTATIVE PETE KELLY, commented that the legislation's intention was focused on how to assist the agencies and provide them with guidance. Cost is an area in which the agency and staff have little knowledge in the private sector. They are aware of the statutory guidance regarding their benefits although the cost issues are of the most concern to those that accrue them. ELMER, LINDSTROM, SPECIAL ASSISTANT, OFFICE OF THE COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, stressed that most regulations result from the passage of new regulations dealing with new policy. He pointed out that was not the case for DHSS. Less than one third of the regulatory packages developed by that Department are the result of new legislation. A majority of the regulations come from an ongoing review. More importantly, over time, then result from regulations which are necessary as budget actions taken by the executive or legislative branch of 13 government. He thought that the new provisions would not help in alleviating the frustrations resulting from the types of regulations most often experienced in that Department. Representative Kohring observed that Mr. Lindstrom had pointed out that the majority of DHSS's regulations are drawn up outside the legislative process. He added that the proposed legislation would alleviate that in the future. HB 130 was HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 4:30 P.M. HOUSE FINANCE COMMITTEE APRIL 26, 1995 1:50 P.M. TAPE HFC 95 - 99, Side 2, #000 - end. TAPE HFC 95 - 100, Side 1, #000 - end. TAPE HFC 95 - 100, Side 2, #000 - end. TAPE HFC 95 - 101, Side 1, #000 - #486. CALL TO ORDER Co-Chair Mark Hanley called the House Finance Committee meeting to order at 1:50 P.M. PRESENT Co-Chair Hanley Representative Kohring Co-Chair Foster Representative Martin Representative Mulder Representative Navarre Representative Brown Representative Parnell Representative Grussendorf Representative Therriault Representative Kelly ALSO PRESENT H. Pat Ladner, Executive Director, Alaska Aerospace Development Corporation, Anchorage; Arliss Sturgulewski, (Testified via Teleconference), Interim Executive Director, Alaska Science & Technology Foundation, Anchorage; Thomas Wright, Staff to Representative Ivan Ivan; Representative Brian Porter; Del Smith, Deputy Commissioner, Department of Public Safety; Margo Knuth, Assistant Attorney General, Criminal Division, Department of Law; Jerry Shriner, Special Assistant, Office of the Commissioner, Department of Corrections; Loren Jones, Director, Division of Alcoholism & Drug Abuse, Department of Health and Social Services; Pam 14 Neal, President, Alaska State Chamber of Commerce; Deborah Behr, Regulations Attorney, Department of Law; Deena Henkins, Section Chief, Drinking Water & Wastewater, Department of Environmental Conservation; Bruce Campbell, Staff to Representative Pete Kelly; John Lindback, Chief of Staff, Office of the Lt. Governor; Elmer Lindstrom, Special Assistant to the Commissioner, Department of Health and Social Services; Mike Corhill, (Testified via teleconference), President, Alaska Peace Officer Association, Anchorage. SUMMARY HB 315 An Act relating to the financing of technological developments by public corporations of the state; and relating to the financing of the Kodiak launch complex, the Fairbanks satellite ground station space park, and a low-rank coal water fuel technology project. CS HB 315 (FIN) was reported out of Committee with "individual recommendations" and with a zero fiscal note by the Department of Commerce and Economic Development dated 4/20/95. HB 269 An Act relating to credits against certain taxes for contributions to certain public educational radio and television networks and stations and to endowments for public educational radio and television networks; and providing for an effective date. CS HB 269 (FIN) was reported out of Committee with a "no recommendation" and with a zero fiscal note by the Department of Revenue dated 4/3/95. HB 159 An Act allowing a person under age 21 to be arrested by a peace officer without a warrant for illegal possession, consumption, or control of alcohol; relating to the offenses of driving with a revoked license, driving while intoxicated, or failure to submit to a chemical test of breath or blood; and providing for an effective date. CS HB 159 (JUD) was reported out of Committee with a "no recommendation" and with fiscal notes by the Department of Administration, the Department of Public Safety dated 3/29/95, the Alaska Court System dated 3/29/95, the Department of Corrections dated 3/29/95 and the Department of Law dated 3/29/95. 15 HB 130 An Act relating to agency review of public comment on the adoption, amendment, and repeal of regulations; relating to the examination of proposed regulations, amendments of regulations, and orders repealing regulations by the Administrative Regulation Review Committee and the Department of Law; relating to the submission to, and acceptance by, the lieutenant governor of proposed regulations, amendments of regulations, and orders repealing regulations; and requiring agencies to make certain determinations before adopting regulations, amendments of regulations, or orders repealing regulations. HB 130 was HELD in Committee for further consideration. HOUSE BILL 315 "An Act relating to the financing of technological developments by public corporations of the state; and relating to the financing of the Kodiak launch complex, the Fairbanks satellite ground station space park, and a low-rank coal water fuel technology project." ARLISS STURGULEWSKI, (TESTIFIED VIA TELECONFERENCE), INTERIM EXECUTIVE DIRECTOR, ALASKA SCIENCE & TECHNOLOGY FOUNDATION, ANCHORAGE, provided Committee members with a memorandum dated 4/26/95 regarding the "Budget Information Requested". [Attachment #1]. She offered to answer questions from the Committee. Representative Navarre questioned how the interest of the fund would be protected. Representative Brown referenced Section #6 and asked if award money would result from the interest of the foundation or from the principle. Ms. Sturgulewski explained that the coal water fuel proposal would be phased over a three year period originating from a grant line. If Phase 2 of the project is accepted, the first payment would be made this fiscal year. Ms. Sturgulewski referenced Attachment #1, pointing out that the analysis would remove the University Agriculture Station and the Aerospace Development Corporation. Representative Brown questioned why the earnings listed on Attachment #1 were greater without the inclusion of coal. Ms. Sturgulewski indicated that those earning would amount to $7.2 million dollars. Discussion followed between Representative Brown and Ms. Sturgulewski regarding the estimated earning reserve payments. Representative Navarre recommended removing the agriculture component and then focusing the availability of that grant money to other 16 projects. Representative Martin thought that Business and Industrial Development Corporations and Organizations (BIDCO) made a commitment to support the Alaska Science and Technology Foundation. Ms. Sturgulewski responded that a BIDCO package has been submitted. The return should be available on May 15th, 1995. Representative Martin asked how many projects would be eliminated with the advance of aerospace. Senator Sturgulewski replied that aerospace would move forward only if appropriate funding was available. She emphasized that this was not an appropriation bill. Representative Martin stressed his concerns with future complications resulting from the legislation. Ms. Sturgulewski responded that the foundation currently handles many small grants and that the board of directors will continue to serve the needs of the small grant community. Ms. Sturgulewski explained that the cold water fuels and royalties plan bids should arrive soon. The repayments for the Science and Tech Foundation and the Department of Education will come from royalties received on commercial sales and from licensing of that technology. Repayments will then become a portion of the negotiation, which must begin in order that Phase 2 can start. Representative Brown asked if satellite facilities are commercially viable. Ms. Sturgulewski stated that there are private interests from business and that it is anticipated that the operation would allow for significant private sector information. She added that the investment of the project is under review from Alaska Industrial Development Export Authority (AIDEA). Representative Brown questioned if that was the normal sequence of events in obtaining AIDEA bonding. H. PAT LADNER, EXECUTIVE DIRECTOR, ALASKA AEROSPACE DEVELOPMENT CORPORATION (AADC), ANCHORAGE, explained that was an appropriate procedure and noted that the proposed legislation would provide Alaska the opportunity to enter into a new industry without placing money at risk. Representative Martin MOVED to adopt Amendment #1. Representative Mulder OBJECTED. Representative Martin stressed that free enterprise should "pay" their own way. Representative Kelly advised that the legislation would be for the benefit of the entire State, agreeing that the 50% application would not be appropriate. Representative Therriault stated that fees would be paid for by the debt 17 service, and noted that the enterprise would be responsible for more than 50%. Representative Mulder added that there would be a financial return through AIDEA and said that this would be a good project. Representative Martin emphasized that the Kodiak launch complex, the Fairbanks satellite ground space park and the low rank coal water fuel technology should be able to accumulate the remaining funds through a private match. Ms. Sturgulewski responded to Representative Brown's questioned regarding the coal water fuel project stating that the major amount of money would be received from the U.S. Department of Energy and would not be private funds. The Alaska Science & Technology Foundation will contribute $3.7 million dollars and the Department of Energy will contribute $17 million dollars for the demonstration of the project. She pointed out that the language of the amendment would make receiving that contribution difficult. Representative Brown referenced a letter from Mr. Snell at AIDEA dated 3/7/95 explaining the anticipated $10.2 million to be received from the federal government and $8 million to be received from the consortium members in order to begin Phase 2. The intention would be for the $4 million state dollars to be spent up-front in order to provide the preliminary study before the other participants provide their money. Ms. Sturgulewski stated that all phases are being worked on together, while indicating that her agency has clarified that the pay back project would need to occur in the first three years. Ms. Sturgulewski stated that Phase 1 has been completed. Phase 2 has not been entered into yet. Representative Brown advised that Representative Martin's amendment would not conflict with the foundation's intention. Ms. Sturgulewski disagreed stating that it would conflict with the amount of money originating from the grant and the Department of Energy. Representative Brown asked if the legislation would affect the Healy Claim Coal Project. Ms. Sturgulewski remarked that the legislation would affect the tide waters demonstration project on the beach. There are a number of ownerships involved with the coal fields and she added, that group was interested and would be participating in the project. A roll call was taken on the MOTION. IN FAVOR: Brown, Martin OPPOSED: Grussendorf, Kelly, Kohring, Mulder, Navarre, Therriault, Hanley, Foster 18 Representative Parnell was not present for the vote. The MOTION FAILED (2-8). Representative Navarre explained Amendment #2. [Attachment of Alaska to participate in the challenger learning center feasibility study. This study would provide a computer program and would establish a learning center addressing interests in space industry technology. He pointed out that Kenai had been listed because the Mayor of Kenai offered to donate the land for that purpose. He agreed that Anchorage would be a more accessible area. Co-Chair Hanley asked if there was a cost associated with the feasibility study. Representative Navarre commented that a cost had not yet been established although he recommended providing a cap limit to those costs. Mr. Ladner elaborated that he had spoken to AIDEA regarding the feasibility study and that a capital budget submission has been completed between Alaska Aerospace and AIDEA. (Tape Change, HFC 95-100, Side 1). Ms. Ladner reiterated that this would be a good program resulting in positive impacts on children who use the center in the math and science areas. Mr. Ladner noted that he supported Amendment #2. He added that the cost to engage in the proposal would be $700 thousand dollars and would be an on-going cost. Representative Mulder asked the cost to provide the feasibility study. Mr. Ladner replied that it had not yet been submitted and that to date determining those costs had been an explorative exercise of the corporation. Co-Chair Hanley suggested including a regional consideration on the amendment. Representative Navarre agreed to amending the amendment to include "other locations". Representative Navarre recommended changing the language in the lower section of the bill deleting "one-quarter" and inserting "one-half". Representative Navarre amended the amendment to Line 17, changing the language to read "(1) one-half by the Alaska Aerospace Development Corporation and AIDEA". Co-Chair Hanley added a "friendly" amendment to the amendment by deleting the language on Line 15 "Kenai and". Representative Navarre MOVED to adopt the amended Amendment Representative Mulder MOVED to report CS HB 315 (FIN) out of 19 Committee with individual recommendations and with the accompanying fiscal note. Representative Martin OBJECTED. A roll call was taken on the MOTION. IN FAVOR: Grussendorf, Kelly, Kohring, Mulder, Navarre, Parnell, Therriault, Foster, Hanley OPPOSED: Martin Representative Brown was not present for the vote. The MOTION PASSED (9-1). CS HB 315 (FIN) was reported out of Committee with "individual recommendations" and with a zero fiscal note by the Department of Commerce and Economic Development dated 4/20/95. HOUSE BILL 269 "An Act relating to credits against certain taxes for contributions to certain public educational radio and television networks and stations and to endowments for public educational radio and television networks; and providing for an effective date." Representative Navarre MOVED to adopt Amendment #3. [Attachment #3]. He stated that Amendment #3 would add in a fisheries landing tax while also would change the provisions to be taken half from the state share and half from the municipality share. The amendment would also add a sunset implemented at the end of five years. There being NO OBJECTION, it was adopted. THOMAS WRIGHT, STAFF TO REPRESENTATIVE IVAN IVAN, noted that Representative Ivan prepared an amendment which would add technical language to Page 2, Line 30, deleting the word "and" which would make it consistent with other chapters. Representative Grussendorf MOVED to adopt Amendment #4. [Attachment #4]. There being NO OBJECTION, it was adopted. Representative Mulder MOVED to report CS HB 269 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. Representative Kohring OBJECTED for purposes of discussion. He asked where the funds would be directed. Mr. Wright responded that decision would be up to the contributor, although, with the members on the endowment trust there would be a strong push to donate to that trust for the interest in building funds to alleviate the State's responsibility for public broadcasting. 20 Donations will not be prohibited directly to specific stations. Representative Kohring noted that the endowment trust was not a State operation or function. He asked if it was legal for the State to provide a tax credit which funds a private entity. Mr. Wright did not know. He recommended that question be directed to the Department of Revenue. Representative Kohring interjected that a precedent could be established for other private organization to request funding. Representative Kohring WITHDREW THE OBJECTION. There being NO OBJECTIONS, it so ordered. CS HB 269 (FIN) was reported out of Committee with "no recommendation" and with a zero fiscal note by the Department of Revenue. HOUSE BILL 159 "An Act allowing a person under age 21 to be arrested by a peace officer without a warrant for illegal possession, consumption, or control of alcohol; relating to the offenses of driving with a revoked license, driving while intoxicated, or failure to submit to a chemical test of breath or blood; and providing for an effective date." REPRESENTATIVE BRIAN PORTER testified in support of HB 159 noting that it would allow the court the option of ordering a person to take Antibes or a similar drug as a condition of parole or probation. Also, the bill would require a person convicted of a felony Driving While Intoxicated (DWI) to be evaluated by an alcohol screening agency before that person is sentenced. Additionally, the legislation would allow the court to impose suspended jail time on a person convicted of a felony DWI, who fails to complete the alcohol treatment ordered by the court. Representative Porter distributed to Committee members a handout titled "Impaired Driving Assessment". [Attachment #5]. Representative Porter emphasized that the most frequent violent crime in the country is drunk driving. A study published by the Alaska Department of Transportation and Public Facilities (DOTPF) stated that alcohol was a factor in 982 accidents statewide in 1993. He added that repeat offenders account for a disproportionate number of fatal accidents. In fatal accidents in which the driver is drunk, those persons with a prior conviction for drunk driving would be five times more likely to be involved than that person with no record. 21 Representative Porter concluded, driving is a privilege, not a right! HB 159 would give Alaska one of the toughest drunk driving statutes in the nation and the legislation would send a clear message that Alaskans will no longer tolerate persons who drive drunk. Representative Porter requested that Section #1 which would allow a person under the age 21 to be arrested by a peace officer, without a warrant, for illegal possession, consumption, or control of an alcoholic beverage and Section ignition interlock device as a part of a fine imposed for convictions of driving while intoxicated or refusal to take a breath test, to remain in the legislation if changes are made. MARGO KNUTH, ASSISTANT ATTORNEY GENERAL, CRIMINAL DIVISION, DEPARTMENT OF LAW, commented that the current Administration supports getting tough on drunk drivers, although, she noted two troublesome sections of the legislation. The first area of concern would be the fiscal impact. Felony case costs are much more to prosecute than misdemeanors. Each case would be required to go to the grand jury. Ms. Knuth noted that there would be 300 to 400 hundred persons each year who would qualify for DWI treatment. She added, that because of felony sanctions, defendants who are accused of felonies more often go to trial than they would on a misdemeanor. For that reason, the Department has submitted fiscal notes requesting four new positions. Ms. Knuth added that the legislation would establish what sentences should be imposed for a felony offense. For the first felony offense, the court would impose a sentence of (120) one hundred twenty days, whereas, for second felony offense, the sentence would be (240) two hundred forty days, and the third sentence would be (360) three hundred sixty days. The Legislature has adopted presumptive sentencing for felony cases. She stressed that the costs associated with the legislation would be significant. MIKE CORHILL, (TESTIFIED VIA TELECONFERENCE), PRESIDENT, ALASKA PEACE OFFICER ASSOCIATION, ANCHORAGE, spoke in support of the legislation. He stated that the Alaska Peace Officer Association believes that a harsher way in dealing with drunk drivers should be implemented. Mr. Corhill reflected on the seriousness of the problem and recommended that the situation be handled criminally. He thought that a Class "C" felony would serve as a deterrent factor to the current crime associated with drinking. Representative Martin asked which section of the legislation 22 would ease the concerns for the Department of Law. Ms. Knuth stated that Section #7 of the bill contains a provision which makes the third and subsequent offenses a felony. Sections (1), (a)(b) & (c), specifies a sentence that is less than what presumptive sentencing requires. Representative Martin asked if problems with the persons individual rights could occur in that section of the legislation dealing with the breath test. Ms. Knuth responded that Alaska was the first State to specify that a blood sample could not be taken from someone suspected of drunk driving. The courts have allowed, as an alternative, the same sanction as if a person were found to be a drunk driver. Ms. Knuth pointed out that law had been challenged and was upheld. JERRY SHRINER, SPECIAL ASSISTANT, OFFICE OF THE COMMISSIONER, DEPARTMENT OF CORRECTIONS, stated that the Department does not oppose the legislation although emphasized that the fiscal impact would be significant. To raise the offense from a misdemeanor to a felony would require the Department to supervise and write court reports on a group of people not currently being supervised. He emphasized that passage of the legislation would require absolute funding. Representative Martin asked if the Department could refer the person to a detox center. Mr. Shriner advised that the Department of Corrections does not have that flexibility. Ms. Knuth interjected that there are inpatient programs which count the same as jail time because they create such an imposition on the persons freedom. (Tape Change, HFC 95-100, Side 2). LOREN JONES, DIRECTOR, DIVISION OF ALCOHOLISM & DRUG ABUSE, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, stated that the Department had concerns with Section #7. He pointed out that as part of the imposition of sentence, the court would be allowed to order, as a condition of parole, that an individual take a drug or combination of drugs which would then prevent the consumption of alcohol. He explained that not everyone would be physically capable of taking the recommended drug Antibuse. Research has shown that the drug only works well when the client is monitored in a treatment program. DEL SMITH, DEPUTY COMMISSIONER, DEPARTMENT OF PUBLIC SAFETY, noted that the Department would be supportive of any effort to remove drunken drivers off the highways, although pointed out the fiscal impact costs associated with the potential jail sentences, resulting in court trial overtime. 23 Representative Brown asked if the current planned enhancements would address information resulting from prior DWI's. Ms. Knuth replied that it would be difficult to determine which DWI offense would be for the offense that person committed in determining sentencing. Representative Brown inquired if the $1.8 million dollar fiscal impact would equal the benefit in safety provided by the legislation. Mr. Smith advised that it is important for public safety to get drunk drivers off the road. Discussion followed among Committee members regarding the fiscal cost and the safety that would be potentially provided through the legislation. Representative Martin MOVED to report CS HB 159 (JUD) out of Committee with individual recommendations. There being NO OBJECTION, it was so ordered. CS HB 159 (JUD) was reported out of Committee with "no recommendations" and with fiscal notes by the Department of Administration, the Department of Public Safety dated 3/29/95, the Alaska Court System dated 3/29/95, the Department of Corrections dated 3/29/95 and the Department of Law dated 3/29/95. HOUSE BILL 130 "An Act relating to agency review of public comment on the adoption, amendment, and repeal of regulations; relating to the examination of proposed regulations, amendments of regulations, and orders repealing regulations by the Administrative Regulation Review Committee and the Department of Law; relating to the submission to, and acceptance by, the lieutenant governor of proposed regulations, amendments of regulations, and orders repealing regulations; and requiring agencies to make certain determinations before adopting regulations, amendments of regulations, or orders repealing regulations." Representative Kelly explained HB 130. He noted that the creation of regulations heretofore has been carried out within the bureaus of state government beyond the light of public scrutiny. He noted that though public input has always been a part of the regulation process, the system is inherently flawed. Regulations have the force of law, but he thought in our form of government law must emanate from the people through their elected officials. Representative Kelly continued, in the current system, unelected regulation writers have the last word in the process, not the people. HB 130 would attempt to remedy 24 that by bringing elected officials back into the loop and making them politically accountable to the people for the regulations that impact their lives. The legislation would begin the process of regulatory reform. Representative Kelly provided Committee members a sectional analysis of the proposed legislation. PAM NEAL, PRESIDENT, ALASKA STATE CHAMBER OF COMMERCE, testified in support of HB 130. She pointed out that regulatory reform was a priority of the State Chamber of Commerce this year. DEBORAH BEHR, REGULATIONS ATTORNEY, DEPARTMENT OF LAW, provided a review of HB 130. She pointed out that the Administration was "neutral" on the bill, although the Lt. Governor's Office is supportive of legislative reform. She noted that the amendment she provided to the sponsor [Attachment #6] would address the Department's concerns regarding the applicability for regulations. Ms. Behr noted that the bill would not provide any dramatic changes to the current system. The Governor currently has the authority to return regulations to the individual department commissioners. Ms. Behr thought that the legislation would well address the cost of compliance. Representative Brown asked how an agency would be able to adopt regulations without receiving public comment. Ms. Behr responded that each department would meet with their individual commissioners and at that time, the commissioner would be briefed. Following passage of the legislation, those meetings would be mandated. (Tape Change, HFC 95-101, Side 1). DEENA HENKINS, SECTION CHIEF, DRINKING WATER AND WASTEWATER, DEPARTMENT OF ENVIRONMENTAL CONSERVATION, explained that the Department has a great deal of experience in compiling comments and providing a written response to those comments. A number of standards are covered by the federal public participation in regulations which requires a written response to comments. She indicated that depending on the complexity and controversy of the regulations, the process would range in cost from several thousand dollars to ten thousand dollars. The process also can take a substantial amount of time to compile which would then cause problems meeting deadlines. JOHN LINDBACK, CHIEF OF STAFF, OFFICE OF THE LT. GOVERNOR, reiterated that the Administration is neutral on the legislation, and would look forward to including the legislation with other regulatory reform bills which have 25 been proposed this session. He added that the Administration is interested in the regulatory reform, thus building a consensus to the process. The Lt. Governor has indicated that the legislation would reflect how public perception currently exists on the process. He pointed out that most people assume that this power is current law. Mr. Lindback then addressed the fiscal notes. He enumerated that amendments to the bill most often have a cost associated with them. He asked that the fiscal notes from each agency adequately reflect the action of the Legislature. Representative Brown asked the amount of time needed for a review. Mr. Lindback agreed that implementation could be a potential problem. He thought that it would work better if a position was assigned specifically to follow the regulations. That position would be responsible to follow all regulations throughout the legislature and know their impact during that process. Representative Mulder asked if there was any portion of the legislation that the Administration found objectional. Mr. Lindback reiterated that the Administration was neutral on the legislation. Representative Kohring asked what would happen if a regulation was turned down by the Governor. Representative Kelly explained that then the comments from the Legislative Review Committee would go to the Governor. Under the proposed legislation, the Legislative Review Committee would be brought into the loop sooner. Representative Kelly responded to Representative Brown's inquiry about the intention to cost. He added that industry has requested for regulation writers to make a determination of the cost for compliance. He indicated that would be very expensive and that the intention during the public process period, was to have the regulation writers address the cost of those regulations. He noted that he would prefer a complete "cost of analysis" for the regulations although stated that resources are limited. Representative Brown asked how the language would affect each department's ability to raise their fees. Mr. Lindback acknowledged that the legislation would clarify that there would be a cost to each private person. Representative Brown voiced her concerns regarding the cost versus the benefits of the legislation. BRUCE CAMPBELL, STAFF, REPRESENTATIVE PETE KELLY, commented that the legislation's intention was focused on how to assist the agencies and provide them with guidance. Cost is an area in which the agency and staff have little knowledge 26 in the private sector. They are aware of the statutory guidance regarding their benefits although the cost issues are of the most concern to those that accrue them. ELMER, LINDSTROM, SPECIAL ASSISTANT, OFFICE OF THE COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, stressed that most regulations result from the passage of new regulations dealing with new policy. He pointed out that was not the case for DHSS. Less than one third of the regulatory packages developed by that Department are the result of new legislation. A majority of the regulations come from an ongoing review. More importantly, over time, then result from regulations which are necessary as budget actions taken by the executive or legislative branch of government. He thought that the new provisions would not help in alleviating the frustrations resulting from the types of regulations most often experienced in that Department. Representative Kohring observed that Mr. Lindstrom had pointed out that the majority of DHSS's regulations are drawn up outside the legislative process. He added that the proposed legislation would alleviate that in the future. HB 130 was HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 4:30 P.M. 27