MINUTES SENATE FINANCE COMMITTEE March 3, 1994 9:20 a.m. TAPES SFC-94, #31, Side 1 (000-end) SFC-94, #31, Side 2 (end-750) CALL TO ORDER Senator Drue Pearce, Co-chair, convened the meeting at approximately 9:20 a.m. PRESENT In addition to Co-chairs Pearce and Frank, Senators Kelly, Kerttula, Rieger and Sharp were present. Senator Jacko did not attend the meeting. ALSO ATTENDING: Duncan Fowler, Ombudsman, Office of the Ombudsman; Bob Poe, Director, Information and Administrative Services, Department of Environmental Conservation; C.E. Swackhammer, Deputy Commissioner, Department of Public Safety; Kenneth Bischoff, Division of Administrative Services, Department of Public Safety; Lauren Campbell, Director, Alaska Highway Safety Planning Agency, Department of Public Safety; Dean J. Guaneli, Chief, Legal Services Section, Criminal Division, Department of Law; Chip Thoma, self; Virginia Stonkus, fiscal analyst, Legislative Finance Division; and aides to committee members and other members of the legislature. VIA TELECONFERENCE: Walt Furnace, General Manager, Alaska Support Industry Alliance, Anchorage, testified in support of SB 215. Wayne Coleman, RCAC, Prince William Sound, Kodiak, was on-line but due to lack of time did not testify. SUMMARY INFORMATION Cambridge Energy Research Associates, Inc. Contract: Senator Kerttula spoke in support of contracting Cambridge Energy Research Associates, Inc. to provide a forecast of oil prices to the Legislature. Senator Kerttula MOVED for acceptance of the contract by the committee. No objections being heard, IT WAS SO ORDERED and signed by all members present. SB 276: An Act relating to criminal justice information; providing procedural requirements for obtaining certain criminal justice information; and providing for an effective date. The committee ADOPTED CSSB 276(FIN) work draft dated February 16, 1994 which incorporated Senate Judiciary Committee amendments of February 15, 1994. Dean J. Guaneli, Chief, Legal Services Section, Criminal Division, Department of Law, testified in support of SB 276, and offered amendment 1 which replaced wording for mandatory fingerprinting. Discussion followed between Co- chairs Pearce, Frank, Senators Kerttula, Kelly, Rieger, and Sharp regarding various aspects of the bill. Duncan Fowler, Ombudsman, Office of the Ombudsman, spoke in support of SB 276. Amendment 1 was ADOPTED. Senators Rieger, Kerttula and Kelly agreed to form a subcommittee to propose amendments on issues discussed. CSSB 276(FIN) work draft as amended was HELD in committee until March 12, 1994 or until the subcommittee proposes a new work draft. SB 278: An Act relating to sobriety checkpoints; and providing for an effective date. C.E. Swackhammer, Deputy Commissioner, Department of Public Safety testified in support of SB 278. Discussion followed between Senators Kerttula, Sharp, Rieger, Kelly, and Co-chair Frank regarding fiscal notes, funding, and other related concerns. Kenneth Bischoff, Division of Administrative Services, Department of Public Safety, and Lauren Campbell, Director, Alaska Highway Safety Planning Agency, Department of Public Safety, appeared briefly before committee to answer questions. SB 278 was HELD in committee until March 12, 1994. CSSB 215: An Act relating to oil and hazardous substances; (RES) redesignating the oil and hazardous substance release response fund and its uses; repealing the authority in law by which marine highway vessels may be designed and constructed to aid in oil and hazardous substance spill cleanup in state marine water using money in the oil and hazardous substance release response fund and the authority of the Department of Environmental Conservation to levy and collect fees for review of certain submissions related to oil; altering requirements applicable to liens for recovery of state expenditures related to oil or hazardous substances; terminating the nickel-per-barrel oil conservation surcharge; levying and collecting two new oil surcharges; and providing for the suspension and reimposition of one of the new surcharges; and providing for an effective date. A teleconference was held and testimony was heard by Walt Furnace, General Manager, Alaska Support Industry Alliance, Anchorage, in support of SB 215. Wayne Coleman, RCAC, Prince William Sound, Kodiak, was on-line but was not heard due to lack of time. SB 215 was HELD in committee and another teleconference will be held if requested. Cambridge Energy Research Associates, Inc. Contract: SENATOR KERTTULA MOVED that Cambridge Energy Research Associates, Inc. contract be adopted. He went on to speak in support of their work, felt they provided a separate point of view and were very accurate in their forecasting of oil prices. No objections being heard, the contract was ADOPTED and signed by Co-chairs Pearce and Frank, Senators Kerttula, Rieger, Kelly, and Sharp. SENATE BILL NO. 276 An Act relating to criminal justice information; providing procedural requirements for obtaining certain criminal justice information; and providing for an effective date. CO-CHAIR PEARCE invited Dean J. Guaneli, Chief, Legal Services Section, Criminal Division, Department of Law, to speak to SB 276. DEAN GUANELI said that for a number of years it had been recognized that the state statutes relating to criminal justice information systems, providing safeguards and oversight over those systems, were in need of amendment. He noted that the legislative auditor, the Division of Legislative Legal Services, and consultants with the Department of Public Safety had recommended changes. SB 276 was a product of several years of effort to provide oversight over criminal justice information systems, to set guidelines of how the information in those computer systems would be disseminated, and to make other changes to the system that were needed to provide adequate and comprehensive records. He informed the committee that, at the present time, no state statute required an individual under arrest to be fingerprinted. In a large number of instances, fingerprints were not taken. He said the only way to have an accurate information system, which keeps track of criminal history records, was to link those records to fingerprints. This bill mandated that fingerprints be taken and if for some reason a person bypassed the first process, it mandated they be taken at the next stage of the process. Mr. Guaneli felt that the need for this legislation was also made clear by federal legislation. The Brady Bill was on example. He felt strongly that if criminal history records were going to be given out - they should be accurate. The FBI had criminal standards for criminal justice information systems and those standards had been followed in SB 276. He pointed out that there had been a separate bill going through Senate Judiciary Committee that addressed fingerprinting requirements only, and more simply and directly than SB 276. From that bill, he had drafted a finger-printing provision preferable to the section in SB 276 in the form of amendment 1, and offered it to the committee for consideration. Co-chair Pearce reminded the committee that when SB 276 had been received in the Senate Finance Committee that the Senate Judiciary Committee had passed SB 276 with an amendment dated February 15, 1994, without drafting a CS. She directed the members' attention to CSSB 276(FIN) work draft dated February 16, 1994 that did incorporate those Senate Judiciary amendments. Co-chair Frank MOVED for adoption of CSSB 276(FIN) work draft dated February 16, 1994 for discussion purposes. No objection being heard, it was ADOPTED. Discussion was had by Senators Kerttula and Kelly regarding the fiscal notes attached to the bill. Senator Kelly asked if the fiscal note for the Department of Corrections in the amount of $181,874 would include staffing requirements required SB 276. Since there was not a representative from the Department of Corrections, Co-chair Pearce requested the department to provide that information to the committee. Senator Kelly asked if the amendment now incorporated in CSSB 276(FIN) work draft would effect the Department of Corrections fiscal note. Senator Kelly asked what fiscal effect amendment 1 would have on SB 276. Mr. Guaneli said that the Department of Corrections already required that everyone brought into their facilities be fingerprinted. In some instances, however, individuals were being missed, and this legislation would tighten up procedures. He said the Department of Corrections did not anticipate any significant increase in the number of fingerprints taken, and therefore did not believe there would be a fiscal impact. He believed there might be a slight impact on local police agencies, but admitted it was hard to assess. The bill had the backing of the Alaska Association of the Chiefs of Police because they realized fingerprinting requirements, although a small burden, was necessary in order to provide an accurate criminal justice information system. Mr. Guaneli felt that SB 276 established a framework to improve the information systems that currently exist. Efforts were underway to link existing systems scattered among the departments and make them more efficient. This bill would also establish a board consisting of commissioners from effected departments to oversee that effort. Senator Kerttula said this system was going to cost money. He objected to fiscal notes that did not lay out the complete cost. Mr. Guaneli said he would like to point out that the improvements in this bill would be supported partially by federal funding. If this legislation is in place, the Department of Safety could take advantage of federal funding and federal information systems. Mr. Guaneli did admit the state would have some expenses in setting up the new framework. In answer to Senator Rieger, regarding page 4, lines 12-14, stating that the commissioner could exempt certain persons from the fingerprinting requirements, Mr. Guaneli said it was intended to prevent certain circumstances where fingerprints would have to be taken repetitively. Senator Rieger asked if the provision requiring fingerprinting to be done within 24 hours was always practical, and could it cause any kind of "Miranda rights" allowing a person to go free if the fingerprints were not taken. Mr. Guaneli felt the 24-hour requirement was reasonable and if it did not happen, technically an arrest warrant could be issued. More practically, when the person appeared in court, the judge would probably order fingerprints taken at that time. He did not believe it could cause a person to be set free. However, he believed if a person was arrested again and had not been fingerprinted the first time, their offense could be treated as a first rather than a second offense. In answer to Senator Rieger, Mr. Guaneli voiced his opinion that it was reasonable for regulations to be adopted, people to be trained, and the advisory board to be formed in order to make policy decisions by the July 1, 1994 effective date. DUNCAN FOWLER, Ombudsman, Office of the Ombudsman, testified in support of SB 276. He said the Office of the Ombudsman had been interested in this legislation for the past three years. He felt it was an important piece of policy legislation that insured the integrity of the criminal justice system records, enabled citizens to correct errors in their criminal records, and most importantly, defined rules for the collection, access and use of criminal justice information. It would also set out penalties for the abuse of information which was not addressed now. He said over the past few years, one to two serious complaints a year had been filed regarding the misuse of criminal justice information. He believed some of them were serious enough, if this framework had been in place, to have been prosecuted. He reiterated that he supported SB 276 and felt it would significantly assist the state in tying up loose ends in this area. Senator Kerttula said that California was using fingerprinting to detect welfare fraud. Senator Rieger asked if Senator Kerttula was suggesting an amendment to SB 276. Senator Kerttula agreed that he would not be opposed to it. CHIP THOMA, testifying as a private citizen, spoke in support of SB 276. He said that in 1972 he worked with the late Senator Terry Miller on previous legislation SB 378 and SJR 9 on the right to privacy. He said legislative history and the public's perception of the possible misuse of police records supported the reasoning for this legislation. He urged the committee's support of SB 276. Co-chair Pearce asked the committee's will on amendment 1. Mr. Guaneli again spoke to the amendment. Senator Sharp MOVED for the conceptual adoption of amendment 1 by Mr. Guaneli. No objection having been raised, the amendment was ADOPTED for incorporation within a new Finance Committee Substitute for the bill. In answer to Senator Rieger, regarding page 8, provisions on how criminal justice information may be released, Mr. Guaneli said that there were no specific provisions, but at this time it was done occasionally on a case by case basis. Mr. Guaneli said these new provisions were recommendations made several years ago by consultants to the Department of Public Safety in a report that had found its way into SB 276. Senator Kerttula voiced his concern over privacy abuse issues in those provisions. Mr. Guaneli said that the preface for the entire section declared criminal justice information confidential. That provision did not currently exist. In addition, the United States Supreme Court had interpreted the law to say that information within criminal justice information systems (computerized data bases) involve some questions of privacy even when all that was kept are public records and convictions. If anything more than statistics were given out, such as names and dates, the law recognized this as confidential information. He felt it was a good idea to have protections on this information. He spoke of an instance where records were requested for members of the ethic's committee and the department asked the members to sign a waiver. This helped the department realize from time to time the legislature would request such information. In answer to Senator Rieger, Mr. Guaneli said current offender information refers to someone who was currently charged with an offense, was moving their way through the criminal justice information system, or was under the supervision of the system (someone in prison, etc.). Senator Rieger asked if a request could be made for a list of individuals who had been convicted of a felony in the last ten years. Mr. Guaneli said that this legislation allowed the Department of Safety to charge a fee for that service. He said that at the present the courts were not linked by any computer system. Those records were kept within the Department of Public Safety and were public. Senator Rieger said that a blanket release of past criminal offenses or past convictions which would include misdemeanors made him very uncomfortable. Senator Kelly voiced similar concerns. Senators Sharp and Kelly asked for clarification on the fiscal note for the Department of Corrections regarding overtime for training and the length of the training. Co-chair Pearce asked Senator Rieger to chair a subcommittee which included Senators Kelly and Kerttula. She announced that SB 276 would be HELD in committee until March 12, 1994, or until the subcommittee proposed a new work draft. SENATE BILL NO. 278 An Act relating to sobriety checkpoints; and providing for an effective date. Co-chair Pearce announced that SB 278 was before the committee. She invited C.E. Swackhammer, Deputy Commissioner, Dept. of Public Safety, to join the committee at the table and speak to SB 278. MR. SWACKHAMMER said that one mission of the Department of Public Safety was to protect the traveling public on the highways. In 1992, there were 89 traffic crashes that resulted in 108 deaths, and 58.3% were alcohol related accidents. He believed advertising in the media the initiation of sobriety checkpoints would provide a deterrent for impaired drivers, and, secondly, would remove impaired drivers from the highways. The way the bill read was that law enforcement agencies must submit a plan to the court specifying time, location, implementation, sequence, justification of the location, time, date, and within 10 days report back to the court with the information obtained. End SFC-94 #31, Side 1 Begin SFC-94 #31, Side 2 Senator Kerttula pointed out that the state police had a limited budget and already were putting a lot of time on the highway. He proposed the idea that state police did not spend enough time off the highways and in the community. He suggested hiring security guards to staff such sobriety checkpoints and have one trooper supervise the process. Mr. Swackhammer said that federal funds would be used to implement the checkpoints. The estimated cost for one four- hour checkpoint would be $2,500 as detailed in the DOS fiscal note. He admitted troopers would be paid overtime for these checkpoints. Senator Kerttula reiterated his concern regarding state trooper overtime and added expense to the state. Senator Sharp understood that because the helmet bill was not going to pass, there would be federal funds available to the Department of Safety in the amount of $2.5-5M. He said the checkpoints would qualify for these federal funds up to three years. He still felt it was a lot of money focused on less than 10 percent of the causes of accidents in the state. He listed other statistics that said, of the total 16,000 accidents, only 1,400 were alcohol related. He felt that state troopers would be more effective on the road. He did not deny that it was a good place to focus but felt the troopers better served the state on the highway. Mr. Swackhammer said that in citing accidents, 60 percent of the people killed were in alcohol related accidents. Senator Sharp disputed his statistics but agreed that it was a disaster. Senator Kerttula again asked why security guards could not be used in the checkpoints. He asked Mr. Swackhammer to propose that to the administration. Mr. Swackhammer said that police officer training took about 16 weeks. He maintained that processing a DWI was quite complicated, took about 3 hours, and he did not believe it was a place where security guards could be used. Senator Rieger commented that the bill seemed to allow municipal police and VPSOs to be used in sobriety checkpoints. He asked if an arrest could be made for other reasons than the purpose of the checkpoint. Mr. Swackhammer said that there was no limitation once the stop had been made but as a practical matter, the goal was to detect impaired drivers and not impede the traveling public more than needed. Mr. Swackhammer thought the troopers would not write someone up for an equipment violation because of the time it would take. Senator Rieger agreed that driving was a privilege and not a right but he felt that the checkpoint was an intrusion in people's lives. Mr. Swackhammer said, as a practical matter, that would not be a problem. Co-chair Frank shared Senator Rieger's concern regarding privacy. He said that the checkpoint was mostly a deterrent effect. He felt though, that to be an effective deterrent, there must be a recurrent occurrence of the checkpoints. He also felt the fiscal note should reflect that recurrent occurrence and it would make it a very large expense. Mr. Swackhammer quoted someone as saying that more troopers on the road would be a deterrent. He said sobriety checkpoints were just a small part of that deterrent. If the department were to stage a checkpoint at $2,500 and found no impaired drivers, that would be a success simply because of the advertisement acting as a deterrent to drunk driving. He stated there was not enough money to put troopers in villages, or to have the presence needed to deter but that should not prevent the department from trying to reduce alcohol related fatalities. He said that was what this legislation was about. Research would be done to choose the best time for the best effect possible. Co-chair Frank asked if the department had considered confiscating the car when an individual has been convicted of a DWI. He said that airplanes and guns could be taken away. He felt chronic drinkers seem to be the problem and deterrents such as checkpoints would not seem to effect the chronic drunk driver. Mr. Swackhammer said that those individuals somehow manage to find automobiles. Co-chair Frank said that it would take a wide net to deter the chronic drunk driver. Senator Kelly asked for an explanation of page 3, line 18- 19, "sobriety checkpoint shall substantially conform." Mr. Swackhammer said that guidelines would be set but the choices of whether to stop every third car or every second could be decided by the flow of traffic, etc. Senator Kelly said he had concerns regarding the word "substantially." In answer to Senator Kelly, Mr. Swackhammer said on page 4, line 11, the words "production of documents" meant asking an individual for their driver's license and registration. Senator Kerttula said that maybe it should say exactly that. Senator Kerttula asked for a breakdown of the checkpoint costs. Mr. Swackhammer stated that it would consist of paying four troopers four hours of overtime ($500 each) plus equipment rental. Senator Kerttula observed that a substantial amount of money was obtained from federal funds for safety. In answer to Senator Kerttula, Mr. Swackhammer did not believe that federal money could be used for enhancing the training of VPSOs or increasing salaries. LAUREN CAMPBELL, Director, Alaska Highway Safety Planning Agency, Department of Public Safety, answered that federal funds cannot be used for on-going programs. It also cannot be used for salaries or to increase salaries. It was designated for special enforcement projects that would reduce serious injury or fatal accidents. Senator Kerttula reiterated his proposal to hire security guards instead of using state troopers on an overtime basis. Senator Sharp asked Mr. Swackhammer to provide the committee with 1993 statistics including alcohol related traffic deaths on the highways. Co-chair Frank asked how a fiscal note for $2,500 would relate to SB 278, and did they intend to have more than one checkpoint as the fiscal note presented. Mr. Swackhammer said that the fiscal note represented one checkpoint. The Department of Safety would apply for grant money to implement the sobriety checkpoint program. Grant money and resources dedicated to that program would determine the number of checkpoints. Co-chair Frank asked if the federal money was likely and what other funds might be available for this program. Mr. Campbell said that other moneys were available beside the helmet money. Enacting the sobriety checkpoints would allow a 5 percent increase, or about a $10,000 increase in federal funds. He agreed that a grant could be written using personnel other than troopers. In answer to Co-chair Frank, Mr. Swackhammer said that using other than trooper personnel in the checkpoints had more to do with management policy than employee contracts. Mr. Swackhammer said that most intoxicated individuals were not the most congenial and cooperative people to deal with and specially trained individuals were needed in those circumstances. Co-chair Frank asked for a projection of a one-year program rather than a fiscal note for one checkpoint. Co-chair Pearce announced that SB 278 would be HELD in committee until March 12, 1994. She asked committee members to present amendments to SB 278 to her office no later than March 11, 1994. CS FOR SENATE BILL NO. 215(RES) An Act relating to oil and hazardous substances; redesignating the oil and hazardous substance release response fund and its uses; repealing the authority in law by which marine highway vessels may be designed and constructed to aid in oil and hazardous substance spill cleanup in state marine water using money in the oil and hazardous substance release response fund and the authority of the Department of Environmental Conservation to levy and collect fees for review of certain submissions related to oil; altering requirements applicable to liens for recovery of state expenditures related to oil or hazardous substances; terminating the nickel-per-barrel oil conservation surcharge; levying and collecting two new oil surcharges; and providing for the suspension and reimposition of one of the new surcharges; and providing for an effective date. Co-chair Pearce announced SB 215 was before the committee. She said that Bob Poe, Director, Information and Administrative Services, Department of Environmental Conservation, and two individuals, via teleconference, were waiting to testify. WALT FURNACE, General Manager, Alaska Support Industry Alliance (ASIA), Anchorage, said he hesitated to testify again but wanted to take a little different stand. He said ASIA was in strong support of SB 215. He wanted to address some concerns others had voiced regarding this bill. The first was that the split-nickel would not be sufficient moneys to fund the oil and hazardous substance release response fund. Testimony supported, under the split-nickel approach fund, balances could range from $16-26M annually. He believed expected expenditures of the fund had been stated at $10-13M. It would appear there were more than sufficient funds to meet the needs of the response fund. The second concern voiced was that SB 215 represented a tax break for the industry. The intent of the 1989 amendment to Chapter 43 was to levy a 5-cent a barrel surcharge until the sum of $50M was accumulated and then suspend that collection. Testimony to date supported collection of from $112-150M. Under SB 215, it appeared that, rather than a tax break, it would provide for a proper adjustment of the fund to include assurances of funding the $50M oil and hazardous substance release contingency and abatement mitigation account. Thirdly, there had been a rumor that the fund was broke. He stated the fund was not broke and anticipated the generation of $112-150M. SB 215 would provide an opportunity to fine tune the fund. Lastly, the taxing power was vested in the state, but the privilege of taxing policy must be exercised carefully and equitably. The general philosophy of taxation should be to only assess tax to the extent needed to support services of government. We must acknowledge that the petroleum industry provided over 80 percent of state revenue. In regard to additional taxes on this industry, how much is too much, and at what point did the taxing policy become a deterrent to business ***FIN116PM 0AASFIN 0426941755 MINUTES SENATE FINANCE COMMITTEE April 26, 1994 5:55 p.m. TAPES SFC-94, #81, Side 1 (000-end) SFC-94, #81, Side 2 (end-000) CALL TO ORDER Senator Drue Pearce, Co-chair, convened the meeting at approximately 5:55 p.m. PRESENT In addition to Co-chairs Pearce and Frank, Senators Rieger, Kerttula, Kelly, and Sharp were present. Senator Jacko did not attend the meeting. ALSO ATTENDING: Cheryl Sutton, aide to Representative Moses, sponsor of HJR 34; Tim Sullivan, aide to Representative Eldon Mulder, sponsor of HB 421; Don Stolworthy, Director, Charitable Gaming Division, Department of Revenue; Tom Dow, Vice President of Hotels, Princess Tours; Clark Gruening, lobbyist, Alaska Visitor Association; Jetta Whittaker, fiscal analyst, Legislative Finance Division; representatives of the media, aides to committee members and other members of the legislature. SUMMARY INFORMATION CSSB 341(RES): An Act relating to the Alaska Tourism Marketing Council; and providing for an effective date. Discussion was had by Co-chair Frank, Pearce, Senators Sharp and Kelly regarding "pro rata share." Even though he had not planned to speak to SB 341, Tom Dow, Vice President of Hotels, Princess Tours, shared information with the committee regarding the vacation planner. Clark Gruening, lobbyist, Alaska Visitor Association, also spoke to the bill. Amendment 1 was ADOPTED. CSSB 341(FIN) was REPORTED out of committee with individual recommendations and a zero fiscal note for the Department of Commerce & Economic Development. CSSB 370(JUD): An Act providing an exemption from gambling laws for gambling conducted by cruise ships for their ticketed passengers in the offshore water of the state outside of ports; requiring certain disclosures in connection with promotions on board cruise ships and making violation of that provision an unfair trade practice; defining `cruise ship'; and providing for exemption fees for certain cruise ships before they can conduct gambling in the offshore water of the state. CSSB 370(FIN) work draft "D" was ADOPTED. Amendment 1 was ADOPTED changing the word "fees" in the title to the word "procedures." Amendment 2 was ADOPTED providing for a sunset for Sections 1, 2 and 3. CSSB 370(FIN) as amended was REPORTED out of committee with individual recommendations, and a zero fiscal note for the Department of Revenue showing a revenue of $(295.0). HB 421: An Act authorizing grants for temporary housing assistance during emergencies and disasters. Tim Sullivan, aide to Representative Eldon Mulder, testified in support of HB 421. Discussion was had by Co-chairs Frank, Pearce, Senators Rieger and Kelly regarding assistance grants and temporary housing. Conceptual Amendment 1 and 2 were ADOPTED. HB 421 was HELD in committee until new language for SCSHB 421(FIN) was complete and could be rescheduled. HJR 34: Requesting the Department of Commerce to give a high priority to fisheries development project grants for the Alaska salmon industry. Cheryl Sutton, aide to Representative Carl Moses, sponsor of HJR 34, testified in support of HJR 34. HJR 34 was REPORTED out of committee with a "do pass" and a zero fiscal note for the Department of Fish & Game. HOUSE JOINT RESOLUTION NO. 34: Requesting the Department of Commerce to give a high priority to fisheries development project grants for the Alaska salmon industry. CO-CHAIR PEARCE said that HJR 34 was before the committee. She invited Cheryl Sutton to join the members at the table. CHERYL SUTTON, fisheries specialist, aide to Representative Carl Moses, House Special Committee on Fisheries, said that HJR 34 requested that the United States Department of Commerce give high priority to fisheries development grants for the Alaska salmon industry. Ground fish development in Alaska had received strong attention by the U.S. Department of Commerce. She pointed out that the salmon industry had undergone new stresses in its ability to compete in a changing world market. The Saltonstall-Kennedy Act made available to the Secretary of Commerce up to 30 percent of the gross receipts under the customs laws from duties on fisheries products. Each year the Secretary must use a portion of those funds to make grants available to assist persons in carrying out research and development projects which address aspects of U.S. fisheries. These projects can include harvesting, processing, associated infrastructures, and other projects. The National Marine Fisheries Service issues the conditions under which applications would be accepted and funded. HJR 34 would ask Congress to place salmon technology development in a prominent position for project funding consideration. This form of governmental assistance would benefit the industry, the state, and the harvesters and processors in the salmon industry. She asked for support for HJR 34. Senator Rieger MOVED for passage of HJR 34 from committee with individual recommendations. No objection being heard, HJR 34 was REPORTED OUT of committee with a "do pass," and a zero fiscal note for the Department of Fish & Game. Co- chairs Pearce and Frank, Senators Rieger, Kelly, Kerttula and Sharp signed "do pass." HOUSE BILL NO. 421: An Act authorizing grants for temporary housing assistance during emergencies and disasters. Co-chair Pearce announced that HB 421 was before the committee. Tim Sullivan, aide to Representative Eldon Mulder, said this bill was introduced by request of Alaska Division of Emergency Services. Currently people that were displaced from their homes during a state-declared disaster have temporary housing arrangements negotiated individually by the Department of Military & Veteran Affairs. This can be a lengthy and tedious process that takes time and energy away from other disaster assistance. FEMA had streamlined this process during a federal-declared disaster by making grants directly to displaced individuals. These individuals made their own housing arrangements reducing costs and removing liability from the government as a lessor. This change in state statutes would result in a more efficient response to temporary housing needs during a state-declared disaster. Senator Rieger asked if this would allow the Governor to have his own capital budget for building or providing housing. Mr. Sullivan said that during a state disaster, individuals could find their own housing and they would receive the grant directly. In answer to Co-chair Pearce, Mr. Sullivan said he did not know if there was a limit to the amount of the grant. Co- chair Frank thought individuals were eligible for a $2,500 grant during disasters. Senator Kelly voiced his concern that state grants be subordinate to FEMA and other private insurance assistance available. He MOVED conceptual amendment 1, changing page 1, line 11, to read "make temporary housing assistance grants, subordinate to FEMA and private insurance assistance." Senator Kerttula asked if the individual amount should be capped. Co-chair Pearce reworded the amendment to read "make grants for temporary housing assistance subordinate to FEMA and private insurance assistance, to eligible disaster victims who have located temporary housing." Co-chair Frank referred to AS 26.23.090 that indicated, the "Governor was authorized to make financial grants to an individual or family to meet disaster related necessary expenses or serious needs of individuals or families adversely affected by the disaster that cannot otherwise adequately be met from other means of assistance." He then referred to AS 26.23.100 relating to temporary housing which said the department would make arrangements for temporary housing. Mr. Sullivan reiterated that the purpose of the legislation was to give individuals grants so they could make their own temporary housing arrangements. Senator Kelly MOVED conceptual amendment 1. No objection being heard, amendment 1 was ADOPTED. Co-chair Frank MOVED conceptual amendment 2 that said grants to any individual or family made under AS 26.23.100 and AS 26.23.090 should not exceed $5000. No objection being heard, it was ADOPTED. Co-chair Pearce announced that a SCSHB 421(FIN) would be HELD until another work draft could be written. CS FOR SENATE BILL NO. 341(RES): An Act relating to the Alaska Tourism Marketing Council; and providing for an effective date. Co-chair Pearce announced that CSSB 241(RES) was before the committee. She said the Resources CS raised the contribution by Alaska Tourism Marketing Council (ATMC) from 15 to 25 percent, and the sunset date extended to 1996. In answer to Co-chair Frank, Co-chair Pearce said that under the powers of ATMC, they could provide space to a qualified trade association in publications and promotional materials developed by the Council. She read from the statutes and explained that for the Travel Planner that was out now, the production costs were around $400,000 and the "pro rata share" paid by the trade association was $200,000 or 50 percent. She understood that their contracted share was 50 percent but under the statute it referred to it as a "pro rata share". TOM DOW, Vice President of Hotels, Princess Tours, said that he was not expecting to testify on SB 341 but he offered information. He said the Vacation Planner contained advertising which was sold to raise money for the industry match, and the sale of labels were the two major fund raising mechanisms. Those pages dedicated to advertising were considered the "pro rata share" of the trade association to carry the cost of the contribution. If the book cost $400,000, and half of the book was advertising, then that was how the 50 percent cost was reached. Co-chair Pearce said that Bob Jacobson had just called those figures into the committee. After discussion was had by Co-chairs Pearce and Frank, and Mr. Dow regarding budget figures and the pro rata share, Mr. Dow indicated that the AA Board was in town tonight and would be willing to answer questions for the committee. Co- chair Frank asked what the pro rata share would be at 25 percent. Co-chair Pearce compared pro rata shares with House and Senate numbers. CLARK GRUENING, lobbyist for Alaska Visitors Association (AVA), said that 15 percent was presently in statute and that was calculated on the total amount of the budget which included the industry contribution. One of the problems AVA would face with a reduced state contribution was the ability to sell ads at the present rate which raised $1.3M for the current year. If the state share would go down (and it would with either the House or Senate numbers) the price of the ads would have to be raised and coverage would be reduced. Co-chair Frank said that if the budget was reduced, the amount of ads would not have to be raised. Mr. Gruening disagreed and said there would be slippage. Senator Sharp said that was under the assumption that they would want to reduce the program. Co-chair Pearce read from the statute AS 44.33.715(a). Co- chair Frank MOVED amendment 1 which deleted the word "not" to subsection (13). No objection being heard, amendment 2 was ADOPTED. End SFC-93 #81, Side 1 Begin SFC-93 #81, Side 2 Discussion was held by Co-chairs Frank and Pearce, and Senator Kelly regarding ad sales and label sales for ATMC matching money. Co-chair Frank MOVED for passage of CSSB 341(FIN) from committee with individual recommendations. No objection being heard, CSSB 341(FIN) was REPORTED OUT of committee with "individual recommendations," and a zero fiscal note for the Department of Commerce & Economic Development. Co- chairs Pearce and Frank signed "do pass." Senators Kelly, Rieger and Sharp signed "no recommendation." CS FOR SENATE BILL NO. 370(JUD): An Act providing an exemption from gambling laws for gambling conducted by cruise ships for their ticketed passengers in the offshore water of the state outside of ports; requiring certain disclosures in connection with promotions on board cruise ships and making violation of that provision an unfair trade practice; defining `cruise ship'; and providing for exemption fees for certain cruise ships before they can conduct gambling in the offshore water of the state. Co-chair Pearce announced that a proposed CSSB 370(FIN) work draft "D" was before the committee. Co-chair Frank MOVED for adoption of CSSB 370(FIN) work draft "D" for discussion purposes. No objection being heard, it was ADOPTED. Co-chair Pearce said CSSB 370(FIN) continued an exemption to cruise ships so they can conduct gambling in the offshore waters of Alaska if they pay an exemption fee. The fees were found on page 2. She noted that there are no cruise ships that came to Alaska carrying more than 2,000 passengers. The company also could decide to not exempt a ship. Section 4 and 5 were added over co***FIN116PM 0AASFIN 0426941755 MINUTES SENATE FINANCE COMMITTEE April 26, 1994 5:55 p.m. TAPES SFC-94, #81, Side 1 (000-end) SFC-94, #81, Side 2 (end-000) CALL TO ORDER Senator Drue Pearce, Co-chair, convened the meeting at approximately 5:55 p.m. PRESENT In addition to Co-chairs Pearce and Frank, Senators Rieger, Kerttula, Kelly, and Sharp were present. Senator Jacko did not attend the meeting. ALSO ATTENDING: Cheryl Sutton, aide to Representative Moses, sponsor of HJR 34; Tim Sullivan, aide to Representative Eldon Mulder, sponsor of HB 421; Don Stolworthy, Director, Charitable Gaming Division, Department of Revenue; Tom Dow, Vice President of Hotels, Princess Tours; Clark Gruening, lobbyist, Alaska Visitor Association; Jetta Whittaker, fiscal analyst, Legislative Finance Division; representatives of the media, aides to committee members and other members of the legislature. SUMMARY INFORMATION CSSB 341(RES): An Act relating to the Alaska Tourism Marketing Council; and providing for an effective date. Discussion was had by Co-chair Frank, Pearce, Senators Sharp and Kelly regarding "pro rata share." Even though he had not planned to speak to SB 341, Tom Dow, Vice President of Hotels, Princess Tours, shared information with the committee regarding the vacation planner. Clark Gruening, lobbyist, Alaska Visitor Association, also spoke to the bill. Amendment 1 was ADOPTED. CSSB 341(FIN) was REPORTED out of committee with individual recommendations and a zero fiscal note for the Department of Commerce & Economic Development. CSSB 370(JUD): An Act providing an exemption from gambling laws for gambling conducted by cruise ships for their ticketed passengers in the offshore water of the state outside of ports; requiring certain disclosures in connection with promotions on board cruise ships and making violation of that provision an unfair trade practice; defining `cruise ship'; and providing for exemption fees for certain cruise ships before they can conduct gambling in the offshore water of the state. CSSB 370(FIN) work draft "D" was ADOPTED. Amendment 1 was ADOPTED changing the word "fees" in the title to the word "procedures." Amendment 2 was ADOPTED providing for a sunset for Sections 1, 2 and 3. CSSB 370(FIN) as amended was REPORTED out of committee with individual recommendations, and a zero fiscal note for the Department of Revenue showing a revenue of $(295.0). HB 421: An Act authorizing grants for temporary housing assistance during emergencies and disasters. Tim Sullivan, aide to Representative Eldon Mulder, testified in support of HB 421. Discussion was had by Co-chairs Frank, Pearce, Senators Rieger and Kelly regarding assistance grants and temporary housing. Conceptual Amendment 1 and 2 were ADOPTED. HB 421 was HELD in committee until new language for SCSHB 421(FIN) was complete and could be rescheduled. HJR 34: Requesting the Department of Commerce to give a high priority to fisheries development project grants for the Alaska salmon industry. Cheryl Sutton, aide to Representative Carl Moses, sponsor of HJR 34, testified in support of HJR 34. HJR 34 was REPORTED out of committee with a "do pass" and a zero fiscal note for the Department of Fish & Game. HOUSE JOINT RESOLUTION NO. 34: Requesting the Department of Commerce to give a high priority to fisheries development project grants for the Alaska salmon industry. CO-CHAIR PEARCE said that HJR 34 was before the committee. She invited Cheryl Sutton to join the members at the table. CHERYL SUTTON, fisheries specialist, aide to Representative Carl Moses, House Special Committee on Fisheries, said that HJR 34 requested that the United States Department of Commerce give high priority to fisheries development grants for the Alaska salmon industry. Ground fish development in Alaska had received strong attention by the U.S. Department of Commerce. She pointed out that the salmon industry had undergone new stresses in its ability to compete in a changing world market. The Saltonstall-Kennedy Act made available to the Secretary of Commerce up to 30 percent of the gross receipts under the customs laws from duties on fisheries products. Each year the Secretary must use a portion of those funds to make grants available to assist persons in carrying out research and development projects which address aspects of U.S. fisheries. These projects can include harvesting, processing, associated infrastructures, and other projects. The National Marine Fisheries Service issues the conditions under which applications would be accepted and funded. HJR 34 would ask Congress to place salmon technology development in a prominent position for project funding consideration. This form of governmental assistance would benefit the industry, the state, and the harvesters and processors in the salmon industry. She asked for support for HJR 34. Senator Rieger MOVED for passage of HJR 34 from committee with individual recommendations. No objection being heard, HJR 34 was REPORTED OUT of committee with a "do pass," and a zero fiscal note for the Department of Fish & Game. Co- chairs Pearce and Frank, Senators Rieger, Kelly, Kerttula and Sharp signed "do pass." HOUSE BILL NO. 421: An Act authorizing grants for temporary housing assistance during emergencies and disasters. Co-chair Pearce announced that HB 421 was before the committee. Tim Sullivan, aide to Representative Eldon Mulder, said this bill was introduced by request of Alaska Division of Emergency Services. Currently people that were displaced from their homes during a state-declared disaster have temporary housing arrangements negotiated individually by the Department of Military & Veteran Affairs. This can be a lengthy and tedious process that takes time and energy away from other disaster assistance. FEMA had streamlined this process during a federal-declared disaster by making grants directly to displaced individuals. These individuals made their own housing arrangements reducing costs and removing liability from the government as a lessor. This change in state statutes would result in a more efficient response to temporary housing needs during a state-declared disaster. Senator Rieger asked if this would allow the Governor to have his own capital budget for building or providing housing. Mr. Sullivan said that during a state disaster, individuals could find their own housing and they would receive the grant directly. In answer to Co-chair Pearce, Mr. Sullivan said he did not know if there was a limit to the amount of the grant. Co- chair Frank thought individuals were eligible for a $2,500 grant during disasters. Senator Kelly voiced his concern that state grants be subordinate to FEMA and other private insurance assistance available. He MOVED conceptual amendment 1, changing page 1, line 11, to read "make temporary housing assistance grants, subordinate to FEMA and private insurance assistance." Senator Kerttula asked if the individual amount should be capped. Co-chair Pearce reworded the amendment to read "make grants for temporary housing assistance subordinate to FEMA and private insurance assistance, to eligible disaster victims who have located temporary housing." Co-chair Frank referred to AS 26.23.090 that indicated, the "Governor was authorized to make financial grants to an individual or family to meet disaster related necessary expenses or serious needs of individuals or families adversely affected by the disaster that cannot otherwise adequately be met from other means of assistance." He then referred to AS 26.23.100 relating to temporary housing which said the department would make arrangements for temporary housing. Mr. Sullivan reiterated that the purpose of the legislation was to give individuals grants so they could make their own temporary housing arrangements. Senator Kelly MOVED conceptual amendment 1. No objection being heard, amendment 1 was ADOPTED. Co-chair Frank MOVED conceptual amendment 2 that said grants to any individual or family made under AS 26.23.100 and AS 26.23.090 should not exceed $5000. No objection being heard, it was ADOPTED. Co-chair Pearce announced that a SCSHB 421(FIN) would be HELD until another work draft could be written. CS FOR SENATE BILL NO. 341(RES): An Act relating to the Alaska Tourism Marketing Council; and providing for an effective date. Co-chair Pearce announced that CSSB 241(RES) was before the committee. She said the Resources CS raised the contribution by Alaska Tourism Marketing Council (ATMC) from 15 to 25 percent, and the sunset date extended to 1996. In answer to Co-chair Frank, Co-chair Pearce said that under the powers of ATMC, they could provide space to a qualified trade association in publications and promotional materials developed by the Council. She read from the statutes and explained that for the Travel Planner that was out now, the production costs were around $400,000 and the "pro rata share" paid by the trade association was $200,000 or 50 percent. She understood that their contracted share was 50 percent but under the statute it referred to it as a "pro rata share". TOM DOW, Vice President of Hotels, Princess Tours, said that he was not expecting to testify on SB 341 but he offered information. He said the Vacation Planner contained advertising which was sold to raise money for the industry match, and the sale of labels were the two major fund raising mechanisms. Those pages dedicated to advertising were considered the "pro rata share" of the trade association to carry the cost of the contribution. If the book cost $400,000, and half of the book was advertising, then that was how the 50 percent cost was reached. Co-chair Pearce said that Bob Jacobson had just called those figures into the committee. After discussion was had by Co-chairs Pearce and Frank, and Mr. Dow regarding budget figures and the pro rata share, Mr. Dow indicated that the AA Board was in town tonight and would be willing to answer questions for the committee. Co- chair Frank asked what the pro rata share would be at 25 percent. Co-chair Pearce compared pro rata shares with House and Senate numbers. CLARK GRUENING, lobbyist for Alaska Visitors Association (AVA), said that 15 percent was presently in statute and that was calculated on the total amount of the budget which included the industry contribution. One of the problems AVA would face with a reduced state contribution was the ability to sell ads at the present rate which raised $1.3M for the current year. If the state share would go down (and it would with either the House or Senate numbers) the price of the ads would have to be raised and coverage would be reduced. Co-chair Frank said that if the budget was reduced, the amount of ads would not have to be raised. Mr. Gruening disagreed and said there would be slippage. Senator Sharp said that was under the assumption that they would want to reduce the program. Co-chair Pearce read from the statute AS 44.33.715(a). Co- chair Frank MOVED amendment 1 which deleted the word "not" to subsection (13). No objection being heard, amendment 2 was ADOPTED. End SFC-93 #81, Side 1 Begin SFC-93 #81, Side 2 Discussion was held by Co-chairs Frank and Pearce, and Senator Kelly regarding ad sales and label sales for ATMC matching money. Co-chair Frank MOVED for passage of CSSB 341(FIN) from committee with individual recommendations. No objection being heard, CSSB 341(FIN) was REPORTED OUT of committee with "individual recommendations," and a zero fiscal note for the Department of Commerce & Economic Development. Co- chairs Pearce and Frank signed "do pass." Senators Kelly, Rieger and Sharp signed "no recommendation." CS FOR SENATE BILL NO. 370(JUD): An Act providing an exemption from gambling laws for gambling conducted by cruise ships for their ticketed passengers in the offshore water of the state outside of ports; requiring certain disclosures in connection with promotions on board cruise ships and making violation of that provision an unfair trade practice; defining `cruise ship'; and providing for exemption fees for certain cruise ships before they can conduct gambling in the offshore water of the state. Co-chair Pearce announced that a proposed CSSB 370(FIN) work draft "D" was before the committee. Co-chair Frank MOVED for adoption of CSSB 370(FIN) work draft "D" for discussion purposes. No objection being heard, it was ADOPTED. Co-chair Pearce said CSSB 370(FIN) continued an exemption to cruise ships so they can conduct gambling in the offshore waters of Alaska if they pay an exemption fee. The fees were found on page 2. She noted that there are no cruise ships that came to Alaska carrying more than 2,000 passengers. The company also could decide to not exempt a ship. Section 4 and 5 were added over concern regarding promotions on board the cruise ships. Co-chair Pearce said that on page 1, line 4, the word "procedures" should replace the word "fees". Senator Kelly MOVED amendment 1 making the word change. Senator Rieger conceptually OBJECTED to the reason behind this amendment. No further objection being heard, amendment 1 was ADOPTED. Co-chair Frank MOVED amendment 2 which would sunset Sections 1, 2, and 3 as of December 30, 1996. Senator Kelly OBJECTED. Co-chair Pearce called for a show of hands and the motion carried on a vote of 3-2 (Co-chairs Pearce and Frank, and Senator Sharp were in favor. Senators Rieger and Kelly were opposed. Senator Kerttula was absent from the meeting when the vote was taken.) Co-chair Pearce estimated income from the exemption procedures to be approximately $590,000. In answer to Senator Kelly, she said there was no way to know if all would play. Co-chair Pearce asked if an exemption rather than an actual license would result in a lower fiscal note for the Department of Revenue. DON STOLWORTHY, Director, Charitable Gaming Division, Department of Revenue, agreed that the term exemptions rather than licenses removed the inferred procedures. He said processing the ships this year would not be very expensive and he estimated the new fiscal note to be somewhere between $50-80,000. Co-chair Frank pointed out that if only 5 companies were involved, the ships could be processed all at once. Discussion followed between Co-chairs Frank and Pearce, Senator Kelly, and Mr. Stolworthy, regarding how the department would enforce this legislation. Co-chair Pearce suggested that the Department not bring a $50-80,000 fiscal note to the department. TOM DOW, Vice President of Hotels, Princess Tours, spoke in support of CSSB 370(FIN). He was surprised at the sunset that was added to the bill. He said it would cause an air of uncertainty in several years. He asked the committee to reconsider the sunset. He thought it would also cause some cumbersome analysis for those that were doing planning 3-4 years out. Co-chair Pearce voiced her opinion that all gaming should be stopped on ships or anywhere. She also said, that if gaming took place, the state should receive a percent of the take and that the books should be available to the state. She said the sunset in two or three years would provide a place for the legislature to analyze if gambling on cruise ships should continue. In answer to Senator Kelly, Mr. Dow said that all six of the Princess Tour cruise ships would pay for the exemption as provided for in the bill. Senator Kelly MOVED for passage of CSSB 370(FIN) from committee with individual recommendations. No objection being heard, it was REPORTED OUT with individual recommendations and with a fiscal note for $43.6 showing a revenue of $620.0. Co-chair Frank, and Senator Rieger signed "do pass." Senator Sharp and Kelly signed "no recommendation." ADJOURNMENT The meeting was recessed at approximately 7:15 p.m.