HOUSE FINANCE COMMITTEE APRIL 27, 1995 1:50 P.M. TAPE HFC 95 - 103, Side 1, #000 - end. TAPE HFC 95 - 103, Side 2, #000 - end. TAPE HFC 95 - 104, Side 1, #000 - #525. 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 Deborah Behr, Regulations Attorney, Department of Law; Reed Stoops, AJ Associates, Juneau; Ron Swanson, Director, Division of Land, Department of Natural Resources; Jeff Logan, Staff to Representative Joe Green; Bob Evans, Representative for the Anchorage School District, Anchorage; Juanita Hensley, Chief, Division of Motor Vehicles, Department of Public Safety; Duane Guiley, Director, School Finance, Department of Education. SUMMARY HB 57 An Act relating to driver's licensing; and providing for an effective date. HB 57 was reported out of Committee with "no recommendation" and with a fiscal note by the Department of Public Safety dated 3/10/95. 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 1 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. CS HB 130 (FIN) was reported out of Committee with a "do pass" recommendation and with fiscal notes: (5) by the Office of the Governor; (1) by the Department of Administration; (1) by the Department of Law; (1) by the Department of Education; (2) by the Department of Health and Social Services; (4) by the Department of Commerce and Economic Development; (1) by the Department of Natural Resources; (2) by the Department of Fish and Game; (1) by the Department of Public Safety; (1) by the Department of Transportation; (1) by the Department of Revenue; (9) by the Department of Environmental Conservation. HB 172 An Act relating to kindergarten programs and compulsory education; to identification required upon enrollment in a public school; to those grades that constitute elementary, junior, and secondary school; and providing for an effective date. HB 172 was reported out of Committee with "no recommendations" and with a zero fiscal note by the Department of Education dated 4/18/95. HB 191 An Act relating to the management and disposal of state land and resources; relating to certain remote parcel and homestead entry land purchase contracts and patents; and providing for an effective date. CS HB 191 (FIN) was reported out of Committee with a "do pass" recommendation and with a fiscal note by the Department of Natural Resources and a zero fiscal note by the Department of Fish and Game dated 4/10/95. 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 2 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 MOVED to adopt Amendment #1. [Copy on file]. There being NO OBJECTION, it was adopted. Representative Kelly MOVED to adopt Amendment #2. [Copy on file]. Representative Kelly stated that the language of the amendment would make writing the regulations more clear. The being NO OBJECTION, it was adopted. Representative Kelly MOVED to adopt Amendment #3. [Copy on file]. Representative Kelly stated that Amendment #3 was requested by the Department of Law and would add an applicability provision. There being NO OBJECTION, it was adopted. Representative Mulder MOVED to report CS HB 130 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTIONS, it was so ordered. CS HB 130 (FIN) was reported out of Committee with a "do pass" recommendation and with fiscal notes by the Department of Administration, the Office of the Governor, the Office of the Lt. Governor, the Department of Law, the Department of Education, the Department of Health and Social Services, the Department of Natural Resources, the Department of Public Safety, the Department of Transportation and Public Facilities, the Department of Environmental Conservation and the Department of Commerce and Economic Development. HOUSE BILL 191 "An Act relating to the management and disposal of state land and resources; relating to certain remote parcel and homestead entry land purchase contracts and patents; and providing for an effective date." Representative Therriault explained that HB 191 was a housekeeping measure intended to clarify certain Title 38 statutes governing the Department of Natural Resources (DNR) management of State land and resources. HB 191 was intended to bring greater efficiency to the management of state lands without sacrificing public involvement in land use decisions. He concluded that the bill was not intended to be a complete rewrite of Title 38, pointing out that it was supported by 3 the Administration in anticipation of streamlining state government. Representative Therriault MOVED to adopt work draft #9- LS0766\M, Luckhaupt, 4/25/95, as the version before the Committee. There being NO OBJECTION, it was adopted. RON SWANSON, DIRECTOR, DIVISION OF LAND, DEPARTMENT OF NATURAL RESOURCES, provided the Committee members a sectional analysis of the legislation. Representative Brown asked for further clarification of the agricultural disposal section. Mr. Swanson replied that Section #21 addresses preference rights and provides the Department discretion to review the qualifications of those bidding. Section #22 would change the terminology of the approximate vicinity. Representative Therriault noted that it was his intention that when dealing with the Department regarding sale or utilization of State land, the State should receive fair market value of leasing and sales. Representative Brown agreed with Representative Therriault's intention. She asked if the legislation would address the conditions and requirements attached to the agricultural disposal. Mr. Swanson explained that those conditions would be a part of that program. The initial portion of the lease requires a development plan. Representative Brown asked the Department's current plans for the agricultural disposal. Mr. Swanson advised that the Division of Agriculture is currently in charge of those parcels and that a small amount of disposals continue to occur each year. Representative Grussendorf asked if the work draft contained language which could create management problems for the Department. Mr. Swanson advised that the legislation had been worked on for several months and that the Department was satisfied with the result. Co-Chair Hanley asked if the set net lease costs would be substantially increased. Mr. Swanson noted that currently only the administrative costs would be recuperated. The leases range from $150-$300 per year depending on when the lease was issued. Set net sites in the Cook Inlet average selling price would be $24 thousand dollars. He noted that the permit could not be sold without the lease and that amount should include the total combined cost. Co-Chair Hanley disagreed explaining that depending on the site location, a person would pay much more than the amount suggested by Mr. Swanson. Mr. Swanson agreed it would be site specific. 4 Representative Therriault reminded Committee members that those people were using State land for economic benefit. He pointed out that in Statute a cap existed limiting the value to $300 dollars. Co-Chair Hanley pointed out "may" had been used in the legislation. Currently, one does not need a lease. He asked if everyone would be charged for tideland use or would they not apply for a lease. Mr. Swanson replied that there are currently two thousand set net licenses issued. When the Department goes to "fair market value", some of those will not continue their lease. Although, with the increased permit cost, income brought to the State will triple. Representative Brown questioned the impact of Section #29 which deals with post mining location corners. She asked if that section would allow someone to stake a new mining claim on the surface of land which is already owned. Mr. Swanson responded, Section #29 would reserve the mineral estate as required by law to the State which would allow anyone to come in and stake whatever mineral interests exist. If there is any discovery or development, compensation must be made to the surface owner. Representative Brown thought that Section #29 was worded so as to allow a person to stake land prior to getting the surface owners involved. She thought the language would establish a mining conflict between the land owner and the State. Mr. Swanson agreed, although, he noted that once the earth is being turned over, a bond must be posted or compensation must be made to the surface owner. Mr. Swanson explained that Section #29, specifies that a bond must be posted when the earth is turned except when going in and posting the corners. That would be the only case when a bond would not need to be posted. Representative Brown asked how private surface parcels currently are staked. Mr. Swanson noted that on State disposal land, a variety of possibilities exist. If it were a small subdivision, it would be closed to mineral entry prior to the sale of the subdivision. Representative Brown asked how that would be affected by the change offered in Section #31. Mr. Swanson acknowledged that current language would close it to mining but not to mineral location. Those gaps would be closed. Representative Brown inquired in passage of the bill, would any current land parcels be affecting someone's residence. Mr. Swanson commented that any small size surface disposal done by the State would be closed after the mineral entry. 5 A conflict could be created within municipalities because they are left open at their request due to mineral entry. Representative Brown asked if the provision contained in Section #29 would be available also to municipalities. Mr. Swanson noted that they would be because the land originally came from the State who reserves those subsurface rights. The State controls what happens beneath the ground. Representative Brown asked what mechanism would be available to the surface owner to prevent staking of the claims on their land. Mr. Swanson explained that there would be two methods: 1. Request that the State close it to mineral entry; 2. File their own mining claim. Discussion followed between Representative Brown and Mr. Swanson regarding the value of the surface being affected by a mining claim and the surface versus the subsurface bonding. Representative Therriault reiterated that the legislation would allow the State to protect it's subsurface rights. Representative Brown thought that Section #29 could establish a situation of conflict and could cause problems for those who have acquired service. Under current law, if someone wanted to do that, they would need to negotiate in advance the compensation. She understood that in the language of the bill, once the staking rights had occurred, the rights would then exist. Representative Brown noted that the surface owner would be in a weakened position to receive fair compensation for their property. Representative Therriault pointed out that the State would close the rights before the surface title was transferred. (Tape Change HFC 95-103, Side 2). Representative Brown asked if it would be a problem for the Department if Section #29 was changed. Mr. Swanson responded that Section #29 was requested by the Department, although, pointed out that there was currently a Supreme Court decision which negates the premise of Section #29. Representative Therriault provided Committee members with a memorandum response to that Superior Court decision from Kerwin Krause, Mineral Property Manager, Department of Natural Resources. [Attachment #1]. Mr. Swanson explained why Section #29 would be more beneficial to the State stating that if a higher subsurface value exists, then the surface being used for should be discovered. He advised that concern exists by private land owners being able to control what happens to the State's subsurface. 6 Representative Brown agreed with Mr. Swanson, although, noted concern of staking by private parties on private lands without the State's knowledge, involvement or control. Mr. Swanson advised that the State would know, as claims legally have to be posted. He did not think inclusion of Section Mr. Swanson instructed that the provision would not change people posting "nuisance" mining claims. The State will determine if the claim is valid. Representative Brown asked whose responsibility would it be for the private land owner, who had a "nuisance" mining claim on their property, to execute the law and the decision. Mr. Swanson replied that it would be the State's responsibility to respond to a nuisance mining claim regardless of who the property was registered to. Representative Brown questioned how many "nuisance" claims had been eliminated resulting from action of the Department. Mr. Swanson did not know, although pointed out that the number of "nuisance" claims have been decreasing due to filing procedures. Representative Therriault referenced Section #32 of the legislation. Mr. Swanson explained the changes to that section. The intent of that section makes State interest in line with that of the federal government. Currently, an alien from a country with "like privileges" can receive authority to stake claims. That privilege has not been exercised thus the inclusion of that language in Section Representative Brown asked if provisions were contained in the legislation which would affect the oil and gas leasing program. Mr. Swanson stated that Section #30 contained one provision which would affect oil and gas by removing the requirement that the director of that division be bonded. Representative Brown inquired if policy changes existed in the proposed legislation. Mr. Swanson commented that policy changes would be made to land disposals placing them under fair market value consideration rather than "give away". Representative Therriault added that Section #51 addresses railroad and utility realignment. Representative Brown questioned the status of land and resources previously disposed of before 1982. Mr. Swanson referenced two provisions; first, Section #52 which provides a savings cost to the Department for home site permits. The other provision deals with remote parcels and the way they are issued. Representative Brown disclosed that she was the 7 owner of a remote parcel which could be affected by that provision. Discussion followed regarding the restrictions currently in law which reduce fair market value by 50%. REED STOOPS, AJ ASSOCIATES, JUNEAU, testified in opposition to Section #29. He explained that Section #29 had been included in the bill resulting from a recent court case regarding a mining claim located on private land. In that case, the judge ruled that in order to do prospecting and file a mining location on land which has been conveyed to a private individual and not closed to private entry, it would be the obligation of the person filing the claim to go to the land owner for consent or to the Department and file a bond to compensate for damages which might be done. He continued, Section #29 would change that decision by providing the person filing the claim permission to enter on private property without the permission of the land owner and without the permission of DNR to file a claim. He emphasized that it would not make sense for someone to trespass on private property without the permission of the landowner. The current decision has been filed in the Supreme Court, placing the land owner in conflict with the mining claimant. Mr. Stoops noted that the factual information provided in Attachment #1 was incorrect. Representative Therriault advised that there are currently techniques being developed to look into the ground in order to find mineral deposits without drilling or digging. He asked if there was an alternative to by-passing the land owner, and going directly to DNR to receive approval and posting for bond. Mr. Stoops noted that under current law, the miner is allowed to go to the Department and file a bond. Mr. Swanson spoke against posting of bonds for the aeromagnetic investigation activity. Mr. Stoops noted that there exists a question if aeromagnetic investigation would be sufficient to constitute a "discovery". He added, two different circumstances are at stake, private and public lands. Representative Therriault noted that since this section was controversial and that there currently exists a court case, he would not object to removing the Section #29. Representative Brown MOVED to delete Section #29. There being NO OBJECTION, it was adopted. Representative Therriault MOVED to report CS HB 191 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. 8 CS HB 191 (FIN) was reported out of Committee with a "do pass" recommendation and with a fiscal note by the Department of Natural Resources and a zero fiscal note by the Department of Fish and Game dated 4/10/95. HOUSE BILL 57 "An Act relating to driver's licensing; and providing for an effective date." JEFF LOGAN, STAFF TO REPRESENTATIVE JOE GREEN, testified in support of HB 57 which would establish new rules for young drivers. He stated that due to the high incidence of accidents, injury and death among teenage drivers, many states and other political jurisdictions are changing the rules which grant teenagers the "license" to drive. He added that language in HB 57 establishes certain conditions during the provisional stage which include restrictions on nighttime driving so that driving takes place in less dangerous circumstances. Mr. Logan added that HB 57 was designed to allow the Department of Public Safety (DPS) to take advantage of new federal legislation. He stated that passage of the legislation would help to stop the teenage carnage on highways. (Tape Change HFC 95-104, Side 1). Mr. Logan provided a sectional analysis of the proposed legislation. Co-Chair Foster voiced concern on how well the legislation would work in the village areas. JUANITA HENSLEY, CHIEF, DIVISION OF MOTOR VEHICLES, DEPARTMENT OF PUBLIC SAFETY, stated that the Department issues statewide a restricted license (off-systems license). Currently, if an individual fifteen (15) years old was driving, they would be required to have a driving permit and to be driving with someone over nineteen (19) years of age and who had been licensed at least one year. The bill would not change that language. She continued that licenses are issued in village offices, and are restricted in order that those people can drive specifically in those village areas. Co-Chair Foster reiterated that it was difficult to get licenses in the village areas, indicating that the legislation would make that process more difficult. Ms. Hensley emphasized that the legislation was proposed to save young adult lives. The graduated license system does not require an individual to have any type of learning driving experience. Young adults in Alaska learn driving by 9 "trial and error". She pointed out that there is no driver's education available in the school system and that 28% of youth are involved in crashes. Ms. Hensley advised that Alaska applied through the National Highway Safety administration for a grant to help offset any costs for implementation of the program. She added that if the legislation was passed, the Department will show how well the program works. Representative Brown questioned the restrictions on young adult drivers between the hours of 1 a.m. to 5 a.m. Representative Parnell thought the primary factor of concern was safety and noted that time of night was a dangerous time to be driving noting that most crashes occur in the late hours of the night. Representative Navarre thought the legislation would create a financial burden on young adults in requiring them to pay an additional $10 dollars. He recommended adding Driver's Education classes to the high school students curriculum. Representative Therriault asked if other states had incorporated this restriction. Ms. Hensley noted that the National Highway Safety Administration has made grants available to two states, California and Maryland. Both of those states have reported a 5% reduction in crashes for drivers between the ages of 15 - 17 years old. Representative Parnell inquired about the $10 thousand dollar fiscal request for the computer work station. Ms. Hensley stated that the cost would include an entire station with desk, work and computer table, chair, and everything else needed to set-up a work space for one individual. Representative Brown asked if the provisions in the bill were tied to the federal requirements. Ms. Hensley stated that the only provisions required would be the hours of curfew and the age of the licensed driver who must accompany the instructed young adult. She emphasized that this was not a federal law, it was a grant. Representative Parnell MOVED to report HB 57 out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. HB 57 was reported out of Committee with a "no recommendation" and with a fiscal note by the Department of Public Safety dated 3/10/95. HOUSE BILL 172 10 "An Act relating to kindergarten programs and compulsory education; to identification required upon enrollment in a public school; to those grades that constitute elementary, junior, and secondary school; and providing for an effective date." BOB EVANS, REPRESENTATIVE FOR THE ANCHORAGE SCHOOL DISTRICT, ANCHORAGE, spoke in support of HB 172. The proposed legislation would add a new statute that anyone enrolling a child in a public school shall, not more than 30 days after enrollment, provide to the public school a copy of the child's birth certificate or other proof of the child's identity if the child has not previously been enrolled in a public school. He added that enacting the legislation would add middle school to the definition of secondary school and would allow for the sixth grade to be included as a part of junior high or middle school. Representative Parnell asked if money would be added to the foundation formula in order to execute the proposed legislation. Mr. Evans noted that costs would not increase in any way. Representative Martin asked if the legislation would make it mandatory for the school districts. Mr. Evans understood that the bill would provide the school districts to incorporate kindergarten as part of the program. Although, he added that it would not mandate that all schools must have one. Representative Parnell pointed out that the bill indicates that each school district shall offer kindergarten services. DUANE GUILEY, DIRECTOR, SCHOOL FINANCE, DEPARTMENT OF EDUCATION, responded to Representative Terry Martin's concern on increased costs to the school districts. He stated that based on the analysis provided by the Department of Education, the bill would carry a zero fiscal note. There would be no increased costs to the State based on the passage of the legislation. No new children would be required to attend public schools and it does not mandate each school district to offer kindergarten services. Mr. Guiley pointed out currently State statute does not speak to a minimum day for kindergarten. The bill will establish in statute the minimum day for kindergarten and would clear up any ambiguity although does not require kindergarten where it does not already exist. Representative Mulder MOVED to report HB 172 out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. 11 HB 172 was reported out of Committee with a "no recommendation" and with a fiscal note by the Department of Education dated 4/18/95. ADJOURNMENT The meeting adjourned at 3:35 P.M. 12