HOUSE FINANCE COMMITTEE APRIL 16, 1996 2:20 P.M. TAPE HFC 96 - 123, Side 1, #000 - end. TAPE HFC 96 - 123, Side 2, #000 - #573. CALL TO ORDER Co-Chair Mark Hanley called the House Finance Committee meeting to order at 2:20 P.M. PRESENT Co-Chair Hanley Representative Martin Co-Chair Foster Representative Mulder Representative Brown Representative Navarre Representative Grussendorf Representative Parnell Representative Kelly Representative Therriault Representative Kohring ALSO PRESENT Camden Toohey, Staff, Senator Bert Sharp; Tom Garrett, Director, Division of Tourism, Department of Commerce and Economic Development; Juanita Hensley, Chief, Driver Services, Division of Motor Vehicles, Department of Public Safety; Annette Kreitzer, Staff, Senator Loren Leman; George Sullivan, Mayor, Anchorage; Marie Sansone, Assistant Attorney General, Civil Division, Department of Law; Crystal Smith, Legal Administrator, Department of Law; Wendy Redman, Vice President, University Relations, University of Alaska; Fred Pascoe, Staff, Representative Tom Brice; Nico Bus, Acting Director, Division of Administrative Services, Department of Natural Resources; Douglas Bailey, (Testified via teleconference), Student, Anchorage; Cindy Feather, (Testified via teleconference), Director, University Student Housing Program, University of Alaska, Anchorage; Chester Wegner, (Testified via teleconference), State Fire Marshall, Anchorage; Chris Kennedy, (Testified via teleconference), Assistant Attorney General, Civil Division, Anchorage; Frank John Dillon, (Testified via teleconference), Executive Vice President, Alaska Trucking Association, Anchorage; Sharon Young, (Testified via teleconference), State Recorder, Recorder's UC Component, Support Services Division, Department of Natural Resources (DNR), Anchorage. SUMMARY SB 69 An Act relating to hazardous chemicals, hazardous materials, and hazardous waste. 1 HCS CS SB 69 (FIN) was reported out of Committee with a "do pass" recommendation and with fiscal notes by the Senate Finance Committee dated 2/07/96, the Department of Military and Veterans Affairs dated 2/07/96, and the Department of Public Safety dated 2/07/96. SB 86 An Act relating to issuance of special request commemorative gold rush motor vehicle license plates. SB 86 was HELD in Committee for further consideration. SB 163 An Act approving the University of Alaska's plans to enter into long-term obligations to borrow money from the Alaska Housing Finance Corporation for the acquisition of student housing facilities; and providing for an effective date. CS SB 163 (FIN)(title am) was reported out of Committee with a "do pass" recommendation and with zero fiscal notes by Statewide Budget Office dated 3/27/96, the Department of Revenue dated 2/14/96 and a fiscal impact note by the Statewide Budget Office. HB 438 An Act relating to the indexing of documents recorded in the state recorder's offices; and providing for an effective date. HB 438 was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Natural Resources dated 3/12/96 and fiscal impact note by the Department of Natural Resources. SENATE BILL 86 "An Act relating to issuance of special request commemorative gold rush motor vehicle license plates." CAMDEN TOOHEY, STAFF, SENATOR BERT SHARP, stated that the purpose of SB 86 would be to commemorate the period between 1994 and 2004 as the Alaska Gold Rush Centennial Decade with the issuance of a new motor vehicle license plate. The Commissioner of the Department of Public Safety (DPS) would design the license plate in consultation with the Alaska Gold Rush Centennial Task Force and license plate manufacturer. 2 Mr. Toohey continued, the legislation had been requested by the Alaska Gold Rush Centennial Task Force representing twenty-five Alaskan communities and parts of Canada. The Gold Rush Task Force was established to coordinate statewide celebrations of the 100th anniversary in order to promote the understanding of the importance of the "Gold Rush Era" in Alaska's history and to enhance tourism opportunities. He added that the 18th Alaska Legislature passed SB 407 which changed the standard plate to the Gold Rush license plate but Governor Hickel vetoed the bill because it removed the two plate requirement. TOM GARRETT, DIRECTOR, DIVISION OF TOURISM, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT (DCED), spoke to the tourism promotion as it related to the Gold Rush license plate. Gold Rush is going to become the predominating theme affecting all tourism promotions for the next few years. The Department is working closely with the Yukon government in the promotion and marketing of the theme. He noted that the Administration is supportive of the legislation. Representative Mulder asked if there had been discussion which would make the design a ten year temporary plate. Mr. Toohey stated there had not been discussion, although the purpose of the legislation would be to extend the ten year celebration to 2004. Representative Mulder inquired if Senator Sharp would be opposed to reinstating the yellow and blue license plate after ten years. Mr. Toohey did not think that Senator Sharp would oppose that concept. Co-Chair Hanley inquired if everyone would be required to replace their license plates. Mr. Toohey stated they would not. The plate will take about a year to design and will be ready to put on cars in the beginning of 1998. There will be a phase in of the new plate when the yellow and blue stock is depleted; then the Department will start distributing the new theme plate. That plate will be for vehicles newly registered or for those others that want to change over their plates at a $5 dollar charge. JUANITA HENSLEY, CHIEF, DRIVER SERVICES, DIVISION OF MOTOR VEHICLES, DEPARTMENT OF PUBLIC SAFETY (DPS), noted that it was the intent of the Department to issue a specified number of plates and that replacement plates would not be required. Co-Chair Hanley questioned the fiscal note reference to a 10% vendor price increase. Ms. Hensley responded that it was anticipated that the new contract because of additional graphics, would cost 10% more. Co-Chair Hanley asked the cost of the "vanity" plates. Ms. Hensley replied that the 3 "vanity" plates cost substantially more per plate, although, the "recovery" cost exceeds the cost of each plate. The Gold Rush plate would be a general issue plate; the current contract cost would be approximately $2.68 each set of plates. Co-Chair Foster asked what had happened to all the designs provided in the contest sponsored two years ago. Ms. Hensley explained that contest had produced the two vanity plates. Representative Brown suggested that the language should clearly define the intent that everyone was not required to have a new Gold Rush plate. Representative Brown MOVED a conceptual amendment which clarified that the change would be a "transition" and that the Department would replace the existing plates with the new design. There being NO OBJECTION, it was adopted. Representative Mulder MOVED a conceptual amendment which would allow for a plate to convert back to its traditional blue and gold after the year 2004. He understood that would make the legislation a temporary law. Representative Brown recommended that both of these statements be displayed, providing a transitional amendment. She suggested that the bill be HELD until the draft was returned. Representative Mulder thought that perhaps the legislation would benefit from a sunset clause in for 2004. Representative Mulder WITHDREW THE MOTION for the conceptual amendment. There being NO OBJECTION, it was withdrawn. Mr. Toohey stated that the concept of reverting to a new plate in the year of 2004 had been discussed in the Senate Finance Committee. Co-Chair Hanley noted that the transitional language would be drafted and that the bill would be HELD in Committee for further consideration following review of the draft. CS SB 86 (FIN) was HELD in Committee for further consideration. SENATE BILL 69 "An Act relating to hazardous chemicals, hazardous materials, and hazardous waste." ANNETTE KREITZER, STAFF, SENATOR LOREN LEMAN, spoke in support of SB 69. She explained that as we downsize government, and make it more "user friendly", a need to 4 assess the efficiency becomes more apparent. Currently, businesses in Alaska must report virtually the same information about hazardous chemicals, materials and wastes in four different formats to four different entities. The proposed legislation would eliminate three formats and one entity. The bill was drafted with input from industry, fire departments, Department of Environmental Conservation (DEC) and the Department of Public Safety (DPS), Division of Fire Prevention. The information reported would be streamlined to one form which would satisfy federal, state and local reporting requirements. Ms. Kreitzer continued, providing the Committee a sectional analysis of the legislation. Section 1 was an amendment added in the House Resources Committee and would add an immunity to Title 9, protecting the State from strict liability for oil spills or other environmental releases at the REAA schools. Without the change, the State and school districts could each be liable for 100% of damages claimed from environmental problems on school sites. The amendment was added as part of the State's response to the Toksook Bay lawsuit. Section 2 & 3 deletes reference to AS 18.70.310 of the state fire marshals placarding program. A placarding program list which hazardous substances or chemicals are in the vicinity and how one should respond in fire suppression. The program has not been effective nor well implemented. Ms. Kreitzer commented that Section 4, Subsection (a) would make the State Emergency Response Commission the agency to approve a form to be used for the reporting of placarding information under a municipal placarding program. The action would ensure that if the form needs to be changed, the commission could coordinate with all agencies that receive such reports. Section 5, Subsection (c) refers to the existing municipal placarding program. Currently under State or federal law, either a municipality or the State Emergency Response Commission (SERC) may add substances to those already required to be reported. This section ensures a public process for adding or removing substances. MARIE SANSONE, ASSISTANT ATTORNEY GENERAL, CIVIL DIVISION, DEPARTMENT OF LAW, commented that the Attorney General's Office was supportive of the proposed legislation. Ms. Kreitzer spoke to Amendment #1 which would place a time- 5 line on when the form should be developed, which would provide date certain times for the public. Representative Mulder MOVED to adopt Amendment #1, 9- LS0360\K.1, Lauterbach, 2/06/96. There being NO OBJECTION, it was adopted. CHESTER WEGNER, (TESTIFIED VIA TELECONFERENCE), ASSISTANT STATE FIRE MARSHAL, ANCHORAGE, advised that the State Fire Marshal's Office was in support of the legislation. He stated that the current program was difficult to implement. CHRIS KENNEDY, (TESTIFIED VIA TELECONFERENCE), ASSISTANT ATTORNEY GENERAL, CIVIL DIVISION, ANCHORAGE, offered to answer questions on Section 1 of the legislation. CRYSTAL SMITH, LEGAL ADMINISTRATOR, DEPARTMENT OF LAW, provided an overview of Section 1. Section 1 represents one aspect of the Administration's response to the States exposure to the major liability which was revealed in the Toksook Bay lawsuit. That lawsuit was brought in response to a fuel spill at an REAA school which occurred in 1990. The State received that school from the Bureau of Indian Affairs (BIA) just a year prior to the incident. The result of the lawsuit has been addressed by a consent judgement. A settlement against the State was made and the REAA's are now paying a portion of that settlement. As a result, the State's liability for damages was revealed. Without the change included in Section 1, the State and school district could be held 100% liable for any damages at the school sites. The exemption from liability is "narrowly" drawn and would only apply for liability for damages. Ms. Smith continued, Section 14 includes the transitional applicability language which has to do with Section 1 exemptions. Representative Parnell asked if under current law, the State was exempt from strict liability. Mr. Kennedy advised that the legislation would change liability for both the State and the REAA. Currently, both the State and the REAA are strictly liable under AS 46.03.822. Representative Parnell asked if there would be any other transfers by the federal government similar to the REAA's that the State currently bears exposure for which are not being addressed in the proposed legislation. Mr. Kennedy suggested there probably were, although in SB 69, a specific problem was addressed at the request of the Senate leadership. 6 FRANK JOHN DILLON, (TESTIFIED VIA TELECONFERENCE), EXECUTIVE VICE PRESIDENT, ALASKA TRUCKING ASSOCIATION, ANCHORAGE, commented that the association which he represents handles the majority of the hazardous materials in the State. Currently, that group is stringently regulated by the federal government. Mr. Dillon requested that the legislation not move beyond federal requirements and regulations. At this time, tremendous amounts of hazardous waste and materials are moved without incident. The reason this can be done, is that there currently exists a body of "good" safety regulations and required enforcement of those rules. He requested that the legislation not move beyond what is reasonable or what is contained in federal regulations. (Tape Change, HFC 96-123, Side 2). Representative Kelly asked if "hazardous waste" as defined in AS 46.03.900 and the Environmental Statute 40 CFR 261 were different. Ms. Kreitzer replied that the AS 46.03.900 was more encompassing than the other one referenced. Ms. Sansone added that the hazardous waste definition which is in law in Title 46 is broad and written in qualitative terms. However, in implementing the State Statute, DEC adopted the Environmental Protection Agency (EPA) identification of hazardous waste sets in regulation, whereas, the State is using the federal standard list of hazardous waste. There is a provision in State law which allows the commissioner of DEC to find other ways in which something may be "hazardous". She added, the DEC commissioner has never carried through and named an additional substance. The definition of "hazardous materials" references another section in the federal regulations. Those regulations designate and identifies hazardous materials for the purposes of transportation laws. Regarding those regulations, the State and local laws are pre-empted by federal regulations which are more detailed. Representative Kelly MOVED a conceptual amendment to Section 11, Subsection (A) & (B), removing (B), which he thought would avoid "non-achievable" standards currently existing in regulation. Representative Brown asked which chemicals would be covered in removal of Subsection (B). There was no representative from DEC who could explain that exemption. Ms. Kreitzer asserted that the Senate Resources Committee made it explicit that it was not their intent to include anything more stringent then already existed in federal 7 regulations. She thought that the legislation was a step toward streamlining all the current reportings required. Removing portions of the legislation could affect the entire bill. Representative Kelly voiced concern that the language was "too broad" and removal would make the State standard less stringent. Co-Chair Hanley pointed out that the intent was to combine four different requirements into one. He explained that if information was required to be reported "somewhere" in statute, and then removed from the form, someone might not be in compliance by not reporting on that one form. Representative Kelly WITHDREW the MOTION to the amendment. There being NO OBJECTION, it was withdrawn. Representative Brown questioned Section 5, Page 3, Line 20, the change from 500 pounds to 10 thousand pounds for reporting of a hazardous chemical. Ms. Kreitzer stated that change was consistent with federal law. Representative Therriault asked why there was a zero fiscal note for DEC. Ms. Kreitzer responded, currently, DEC has been delegated by the State Emergency Response Commission (SERC) as the agency which receives "community right to know" reports. That motion has not been rescinded to date. DEC currently makes the report available and the Senate assumed that DEC could continue to provide that obligation. She emphasized that this is not a new requirement. Representative Martin MOVED to report HCS CS SB 69 (FIN) out of Committee with individual recommendations. There being NO OBJECTION, it was so ordered. HCS CS SB 69 (FIN) was reported out of Committee with a "do pass" recommendation and with a fiscal note by the Department of Public Safety dated 2/07/96 and zero fiscal notes by the Department of Military & Veterans Affairs dated 2/07/96 and the Senate Finance Committee dated 2/07/96. SENATE BILL 163 "An Act approving the University of Alaska's plans to enter into long-term obligations to borrow money from the Alaska Housing Finance Corporation for the acquisition of student housing facilities; and providing for an effective date." WENDY REDMAN, VICE PRESIDENT, UNIVERSITY RELATIONS, UNIVERSITY OF ALASKA, spoke in support of SB 163. She pointed out that last year the bill included both Juneau and Ketchikan housing projects which this year have been removed. The Juneau housing project was funded last year 8 with a cash appropriation; the Ketchikan housing project is currently going forward with private financing through a local bank. The proposed legislation is only for an Anchorage student housing project. The University has worked with Alaska Housing Finance Corporation (AHFC) over the interim in order to create a financing plan which will meet both entities needs. The Governor has agreed to include the project as part of the AHFC Capital Improvement Project (CIP) for FY98. Ms. Redman added that it had not been the Board of Regents intent to turn Anchorage into a residential campus. A residential campus would have between 35% to 55% of their students housed. The Fairbanks campus is a residential campus. Currently, in Anchorage, only 3% of those students are residential. With the proposed legislation, that number would increase to 7%. The long range goals would be to increase the Anchorage campus to 15% students housed. She urged the Committee's support of the legislation. Representative Brown asked the source of the interest rate subsidy. Ms. Redman stated that would result from AHFC reserves. Representative Navarre voiced support of the legislation. He suggested assessment of housing needs within the outlining campuses. GEORGE SULLIVAN, MAYOR, ANCHORAGE, spoke in support of SB 163, pointing out that the Anchorage campus has an extensive waiting list for campus bed space. DOUGLAS BAILEY, (TESTIFIED VIA TELECONFERENCE), STUDENT, UNIVERSITY OF ALASKA, ANCHORAGE, testified in support of the bill. He stressed the need for more housing for University students on the Anchorage campus. CINDY FEATHER, (TESTIFIED VIA TELECONFERENCE), DIRECTOR, STUDENT HOUSING PROGRAM, UNIVERSITY OF ALASKA, ANCHORAGE, offered to answer any questions of the Committee regarding the proposed project or financial concerns in connection with it. She stressed that the program has a lot of support from the public and from the students. Representative Navarre MOVED to report CS SB 163 (FIN)(title am) out of Committee with individual recommendations. There being NO OBJECTION, it was so ordered. CS SB 163 (FIN) (tile am) was reported out of Committee with a "do pass" recommendation and with a fiscal note by Statewide Budget Office and zero fiscal notes by the 9 Statewide Budget Office dated 3/27/96 and the Department of Revenue dated 2/14/96. HOUSE BILL 438 "An Act relating to the indexing of documents recorded in the state recorder's offices; and providing for an effective date." FRED PASCOE, STAFF, REPRESENTATIVE TOM BRICE, spoke to HB 438. He stated that the legislation would mandate a geographic location indexing method within the State Recorder's Office. The result will be the continuation of an effective cataloguing system of lands in the State, and future possibilities of cross referencing that information with the resources, leases, and claims information in other data bases. Mr. Pascoe stated that under the current work load, the Record's Office does not anticipate a significant fiscal impact. Land is an important asset in our State, and providing the data for an eventually up-to-date, integrated system for recording and retrieving resource, ownership, and location data is in everyone's best interest. SHARON YOUNG, (TESTIFIED VIA TELECONFERENCE), STATE RECORDER, RECORDER'S UC COMPONENT, SUPPORT SERVICES DIVISION, DEPARTMENT OF NATURAL RESOURCES, ANCHORAGE, stated that HB 438 would mandate the location index for the recording system. A location index is currently maintained by the State, which has been a curtesy for a number of years. Because it is a "curtesy", it gives way to other statutory mandates. There are many location gaps in the index at this time. She offered to answer questions of the Committee. Representative Mulder referenced the revised fiscal note included by the Department of Natural Resources. Representative Brown voiced concern with the lack of funding to implement the fiscal impact. She suggested that these be program receipts. Ms. Young pointed out that the bill is viewed as "prospective", being too extensive a task to go back and capture the old information. NICO BUS, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF NATURAL RESOURCES, added, initially when the legislation was evaluated, there were two fiscal notes, one for the State Recorder's Office submitted January 29, 1996, and one for the Information Resource Management. The revised fiscal note deals only with the impact to the State Recorder's Office. Now that has been changed to a zero impact. He added, however, the Information Resource 10 Management fiscal note is still valid. Representative Brown MOVED to report HB 438 out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. HB 438 was reported out of Committee with a "do pass" recommendation and with a fiscal note by the Department of Natural Resources dated 3/12/96 and a new zero fiscal note by the Department of Natural Resources. ADJOURNMENT The meeting adjourned at 3:35 P.M. 11