HOUSE FINANCE COMMITTEE March 4, 1998 1:50 P.M. TAPE HFC 98 - 52, Side 1 TAPE HFC 98 - 52, Side 2 TAPE HFC 98 - 53, Side 1 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 Kelly Co-Chair Therriault Representative Kohring Representative Davies Representative Martin Representative Davis Representative Mulder Representative Foster Representative Grussendorf Representative Moses was absent from the meeting. ALSO PRESENT Annalee McConnell, Director, Office of Management and Budget, Office of the Governor; Dan Spencer, Chief Budget Analyst, Office of Management and Budget, Office of the Governor; Nancy Slagle, Director, Division of Administrative Services, Department of Transportation; James Baldwin, Assistant Attorney General, Department of Law; Mike Tibbles, Staff, Representative Therriault; Jeff Logan, Staff, Representative Green; Jim Sourant, Staff, Representative Porter. The following testified via teleconference: Fred Smith, Association of Village Council Presidents, Bethel; Debra Tennyson, Department of Community and Regional Affairs, Anchorage; Chris Hladick, City Manager, Dillingham. SUMMARY HJR 36 Proposing amendments to the Constitution of the State of Alaska relating to redistricting of the legislature, and repealing as obsolete language in the article setting out the apportionment schedule used to elect the members of the first state legislature. HJR 36 was HELD in Committee for further consideration. HJR 44 Proposing amendments to the Constitution of the State of Alaska relating to redistricting of the legislature. HJR 44 was HELD in Committee for further consideration. HB 370 "An Act making an appropriation for relief of the 1997 fishery disaster in Bristol Bay and on the Kuskokwim River; and providing for an effective date." HB 370 was HELD in Committee for further consideration. HB 461 "An Act making supplemental and special appropriations; and providing for an effective date." HB 461 was HELD in Committee for further consideration. HOUSE BILL NO. 370 "An Act making an appropriation for relief of the 1997 fishery disaster in Bristol Bay and on the Kuskokwim River; and providing for an effective date." Co-Chair Hanley provided members with a proposed committee substitute for HB 370, Work Draft 0-LS139\F, dated 3/4/98 (copy on file). He clarified that the proposed committee substitute identifies the same regions and funding amounts as contained in the original version. He added that the breakout of loans and community block grants are the same. FRED SMITH, ASSOCIATION OF VILLAGE COUNCIL PRESIDENTS, BETHEL testified via teleconference in support of HB 370. He noted that the legislation includes areas that were not in the Governor's original declaration area and provides a full state obligation for the federal funds. He spoke against changes to the legislation that would delay its passage. CHRIS HLADICK, CITY MANAGER, DILLINGHAM testified via teleconference in support of HB 370. He noted that projects would be fisheries related and would focus on getting as many people to work as possible. He stressed that the money would not go into the general fund to pay for general services. DEBRA TENNYSON, DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS, ANCHORAGE testified via teleconference. She gave examples of proposed projects. Projects would include repairs to existing buildings, dock and harbor projects, road and trail work, landfill maintenance, and boat ramps. She clarified that grants would not be limited to fishermen. She emphasized that most of the communities are small and the majority of the population in these communities is involved in fishing activities. Co-Chair Hanley expressed frustration with federal guidelines. He observed that economic relief is indirect. He noted that, although communities will benefit, it is unlikely that future economic disasters will be reduced due to the funding. Representative Foster MOVED to ADOPT Work Draft 0-LS139\F, dated 3/4/98. There being NO OBJECTION, it was so ordered. Co-Chair Hanley reviewed changes made by the committee substitute. He observed that the total funds are the same. The loan funds were separated from the community grants. He noted that the Department of Community and Regional Affairs did not have the legal authority to provide loans. Loans would be appropriated through the Disaster Relief Fund. The Commercial Fishing and Revolving Loan Fund (CFRL) would be used to match federal funds instead of general funds. The (CFRL) has a surplus of $3 million dollars. The money will be repaid. The only cost would be the loss of interest. DAN SPENCER, CHIEF BUDGET ANALYST, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR stated that the Administration is still checking on the funding source change. Co-Chair Hanley observed that the match and the money would be split at the same rate. HB 370 was HELD in Committee for further consideration. HOUSE BILL NO. 461 "An Act making supplemental and special appropriations; and providing for an effective date." Co-Chair Hanley provided members with a proposed committee substitute for HB 461, Work Draft 0-LS1638\E, dated 3/4/98(copy on file). Representative Martin MOVED to ADOPT Work Draft 0-LS1638\E, dated 3/4/98. There being NO OBJECTION, it was so ordered. Co-Chair Hanley compared CSHB 461 (FIN) with the original version, HB 461. He noted that the language "appropriations that are time sensitive" was removed at the request of the drafter. The drafter accidentally removed subsection (a). He observed that Amendment 1 would add subsection (a) back into the committee substitute (copy on file). He observed that section 1 (b) was deleted because it is contained in HB 370. Subsection (c) of the old version is now subsection (a). He noted that the total amount is the same. There was a funding source change. Subsection (c) of the committee substitute is similar to subsection (d) of the previous version. The funding source was changed from general fund program receipts to federal funds. The federal funding source is the time study match money received by school districts. This will not count as general fund expenditures because federal funds will be used. Subsection (d) and (e) of the committee substitute correspond to subsections (e) and (I). These sections provide funding for the Poker Flats Research range. Total funding for the Poker Flats project is $20 million dollars. Subsection (f) in the committee substitute is the same. Subsection (g) is the same dollar amount. Subsistence harvest research projects was changed to subsistence data collection. Subsection (h) was previously subsection (j). Subsection (i) was previously subsection (k). Representative Martin MOVED to ADOPT Amendment 1, to add subsection (a). Subsection (a) would add $1,786,400 thousand dollars in Alaska Housing Finance Corporation corporate receipts for operation of the Bank of America building. There being NO OBJECTION, it was so ordered. Mr. Spencer discussed Amendment 2. Amendment 2 would add $1,303,600 thousand dollars to the Department of Revenue for Child Support Enforcement Division grants (copy on file). He observed that state and federal funding would cover three federal fiscal years, which is the life of the grants. He suggested that the appropriation be made as a capital expense so that the funding does not lapse at the end of the fiscal year. Representative Davies MOVED to ADOPT Amendment 2 with a conceptual amendment to include the appropriation in the back section as a capital project. There being NO OBJECTION, it was so ordered. Co-Chair Hanley noted that he anticipated an additional amendment from the Department of Corrections. Representative Davies referred to subsection (f), Glennallen to Tok highway funding. Co-Chair Hanley noted that the Statewide Transportation Improvement Program (STIP) was amended to include the project. The Department has sufficient funding to provide the state match. ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR noted that the condition of the road has deteriorated. She stressed that the urgency of completing this project is greater than any other project that is underway. NANCY SLAGLE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF TRANSPORTATION noted that the Department wants to complete the work this summer. The bid would have to be released in April. Poor weather conditions caused the road to deteriorate faster than anticipated. The Department had projects included in the STIP that went through to the year 2004. These were removed from the STIP and combined into one project. Approval has been received from the federal Highways Department. No other projects will be delayed because of the project. The Department is unsure of the level of federal funding it will receive in FY 99. Representative Grussendorf noted that the original supplemental request included $464 thousand dollars in test fisheries receipts for a project relating to herring roe on kelp. He stressed the need for quick action on this appropriation. Ms. McConnell stressed that many of the supplemental projects are time sensitive. She spoke in support of the appropriation. HB 461 was HELD in Committee for further consideration. HOUSE JOINT RESOLUTION NO. 44 Proposing amendments to the Constitution of the State of Alaska relating to redistricting of the legislature. Co-Chair Therriault noted that Work Draft, 0-LS538\I was adopted on 3/3/98. Co-Chair Therriault MOVED to ADOPT Amendment 1 (copy on file). Amendment 1 would add "and as may be provided by law" after "section" on page 3, line 3. Representative Davies OBJECTED. Co-Chair Therriault stated that the intent is to clarify that the legislature may add additional clarifications through statute. JIM SOURANT, STAFF, REPRESENTATIVE PORTER observed that Amendment 1 would allow the legislature to provide additional firm guidelines for the chief justice in the process of selecting the five board members. Co-Chair Therriault observed that the Court indicated that it would be more comfortable with greater direction by the legislature. Mr. Sourant agreed. Co-Chair Therriault noted that clarification might pertain to the length of residency or a prohibition against all members being from one political party. Representative Davies stated his objection based on the fact that the other criteria would not be known at the time the question goes on the ballot. He stressed that specific concerns could be addressed in the resolution. Representative Mulder spoke in support of the amendment. He maintained that the intent is to make the process fair and equitable. Co-Chair Therriault noted that geographical balance would be maintained by requiring one member to be appointed from each judicial district. Mr. Sourant emphasized that changes to the Constitution should be minimal. He stated that additional statutory clarification could not be contrary to the Constitution. Representative Davies asked if the language "subject to the provisions of this section" is necessary. Co-Chair Therriault stated that the language clarifies that the Constitution contains some requirements and that additional changes may be placed in law. Representative Davies asserted that Amendment 1 would open the process to political influences. A roll call vote was taken on the motion. IN FAVOR: Mulder, Davis, Foster, Kelly, Kohring, Therriault OPPOSED: Davies, Grussendorf, Hanley Representatives Moses and Martin were absent from the vote. The MOTION PASSED (6-3). Co-Chair Therriault MOVED to ADOPT Amendment 2 (copy on file). He observed that the amendment clarifies when members of the redistricting board are to be appointed. He observed that the current version would provide that they be appointed between January 1st and 16th of the year following the census. He emphasized that board members have been appointed before the information is actually available. He observed that members could use the time to review court cases and establish procedures. The amendment would provide that board members be appointed by September 1st of the year of the census. There being NO OBJECTION, Amendment 2 was adopted. Co-Chair Therriault MOVED to ADOPT Amendment 3 (copy on file). Representative Grussendorf OBJECTED for the purpose of discussion. Co-Chair Therriault noted that Amendment 3 would require members to reside in the judicial district that they are appointed to represent. He added that members would be appointed based on judicial districts in existence on January 1, 1999. In response to a question by Representative Davies, Co-Chair Therriault stated that the provision would retain 5 members on the committee. Geographical representation would be maintained. (Tape Change, HFC 98 -52, Side 1) Representative Davies felt that it would make sense for the board to reflect changes in judicial districts. He spoke in support of one member from each of the judicial district and one member at-large. Co-Chair Therriault spoke against a mechanism that would expand the board. Co-Chair Hanley pointed out that an additional judicial district could result in an even number of members on the board. He observed that the at-large member could come from the new district if another one is created. Representative Davies WITHDREW his objection. There being NO OBJECTION, Amendment 3 was adopted. Co-Chair Therriault MOVED to ADOPT Amendment 4 (copy on file). Representative Davies OBJECTED. MIKE TIBBLES, STAFF, REPRESENTATIVE THERRIAULT explained that Amendment 4 would change the effective date from the year 2001 to the year 2000. This change corresponds to the appointment of board members. Co-Chair Therriault clarified that the new mechanism would be before the board when they are appointed in the year 2000. Mr. Tibbles noted that the amendment addresses subsection (b). The amendment would delete the effective date of December 31, 2000. The section would be effective on the date that the lieutenant governor certifies that a majority of the voters have approved the amendment. Section 12 is amended to reflect the year 2000 date. Representative Martin noted that the transitional section is not part of the Constitution. Co-Chair Therriault noted that section 8 on page 4 provides that the current redistribution plan stay in place until the new plan is approved. Co-Chair Hanley pointed out that constitutional amendments are enacted under the provisions of the Constitution. He questioned the need for section 8. Mr. Baldwin clarified that Article XIII of the Constitution provides that amendments are effective 30 days after the certification of the election returns, unless otherwise provided in the amendment. Co-Chair Therriault asked if it would be possible for the Governor to impanel a redistricting board in 1998 or 1999 based on old census information. Mr. Baldwin did not think that a governor could appoint a board based on the prior census. He noted that reapportionment boards have been impaneled before the end of a governor's term. Governor Cowper appointed a board before the end of his term. Governor Hickel discharged the board when he came to office. There must be some dramatic circumstance to do a midterm reapportionment. Co-Chair Hanley pointed out that under the legislation, the chief justice would appoint the board. He noted that the board could not recommend a reapportionment plan until they receive the new census data. In response to a question by Co-Chair Hanley, Mr. Baldwin reiterated his belief that the transitional section provides for a 12-year cycle. He emphasized that the provision encourages litigation to keep the present plan in place for another legislative term. He observed that litigation was not resolved on the 1990 reapportionment until 1994. Co-Chair Hanley summarized that if the transitional language were removed the amendment would take effect under normal constitutional provisions. Mr. Baldwin stressed his concern that section 8 would result in the retention of the current plan for an additional 2 years. Representative Martin pointed out that a governor would need an appropriation to fund a reapportionment board. He observed that the first United States census for the state of Alaska was done in 1990. He maintained that the state of Alaska would not receive census information before September. Mr. Sourant explained that the 2001 effective date was arbitrarily picked. He did not object to changing the effective date. He agreed that reapportionment can only occur once every 10 years unless there is a compelling reason. He did not see any reason for a delayed effective date. Co-Chair Therriault WITHDREW Amendment 4. He MOVED to ADOPT Amendment 5, to delete section 11 on page 5, lines 15 - 24. There being NO OBJECTION, it was so ordered. Co-Chair Hanley observed that the Constitution states that the reapportionment and redistricting shall be effective for the members of the legislature until after the official reporting of the next decennial census. The new criteria would be sixty days after the adoption and final adjudication of the succeeding redistricting plan. Co-Chair Therriault observed that at the time of the last redistricting, Representative Miller's district had doubled in population while other districts had dropped. He observed that the Representative would not have wanted to see litigation continue the inequity. Co-Chair Hanley summarized that the old system would remain until all litigation were resolved. Representative Davies maintained that the "final plan" on page 3, line 13 refers to the final plan of the redistricting board. He asserted that the language is confusing and that there needs to be a distinction between the final plan of the redistricting board and the existing official plan. Mr. Sourant emphasized the need for a plan to be in place prior to the election. Co-Chair Therriault observed that a temporary new plan would at least redistribute population. Discussion ensued regarding the interpretation of section 8. Mr. Sourant clarified that the sponsor's intent is that the old plan remain in place until the new plan has been resolved. Co-Chair Hanley agreed that "final plan" could be interpreted to mean the new redistricting plan. Representative Martin stressed that the inclination is to prolong the process. Mr. Sourant stated that the language on page 5, lines 15 - 24 would clarify that the "final plan" refers to the plan that is in existence today. Representative Mulder and Co-Chair Hanley agreed that the language implies that the new plan would stay in place until it is replaced by the final official plan. Members concluded that section 8 needed further clarification. Representative Davies spoke in support of retaining the new redistricting plan as a temporary plan until it is replaced by a new adjusted plan. Mr. Sourant stressed that language was added to expedite Supreme Court consideration of litigation relating to the redistricting plan. HCR 44 was HELD in Committee for further consideration. HOUSE JOINT RESOLUTION NO. 36 Proposing amendments to the Constitution of the State of Alaska relating to redistricting of the legislature, and repealing as obsolete language in the article setting out the apportionment schedule used to elect the members of the first state legislature. JEFF LOGAN, STAFF, REPRESENTATIVE GREEN provided members with Amendment 1 (copy on file). He noted that the amendment applies to the effective date and the applicability section. The amendment would leave the effective date but delete the applicability section. (Tape Change, HFC 98 -53, Side 1) Mr. Logan explained that the amendment would clarify that the reapportionment plan that is currently in effect is the plan that the sponsor wants to be under until the new plan takes effect. He maintained that a governor could reapportion the state at times other than immediately after the decennial census. Co-Chair Therriault pointed out that there has not been a problem with a governor trying to redistrict before the census. Mr. Logan noted that there was a mid session reapportionment in 1964 as the result of a court decision. He asserted that reapportionment could be necessary due to a dramatic rise in population in time of war or during construction of a new pipeline. Co-Chair Therriault pointed out that the Governor would select the reapportionment board. Representative Davies asserted that the State would want to reapportion if there were a dramatic change in population. Mr. Logan stressed that the intent is to clarify that the reapportionment plan that is currently in place would be the plan that would be used. Representative Davies MOVED to delete section 10. There being NO OBJECTION, it was so ordered. Representative Martin expressed concern with the use of "contiguous". He observed that the US Supreme Court has required that districts be compact as well as contiguous. HJR 36 was HELD in Committee for further consideration. RECESSED The Committee was recessed until 1:30 p.m. on March 5, 1998. Draft HFC 10 3/4/98pm