MINUTES SENATE FINANCE COMMITTEE May 7, 1994 1:50 p.m. TAPES SFC-94, #86, Side 2 (575-296) CALL TO ORDER Co-chair Drue Pearce convened the meeting at approximately 1:50 p.m. PRESENT In addition to Co-chair Pearce, Senators Kelly, Kerttula, Rieger, and Sharp were present. Co-chair Frank and Senator Jacko arrived soon after the meeting began. ALSO ATTENDING: Representative Toohey; Representative Hanley; Harry Noah, Commissioner, Dept. of Natural Resources; Shelby Stastny, Director, Office of Management and Budget; Nancy Slagle, Director of Budget Review, Office of Management and Budget; Alison Elgee, Budget Director, University of Alaska; Dave Skidmore, aide to Senator Frank; and aides to committee members and other members of the legislature. SUMMARY INFORMATION HB 301 - BAN SALE OF SOME STUDDED TIRES AND STUDS CS SSHB 301 (L&C) was REPORTED OUT of committee with a zero fiscal note from the Dept. of Transportation and Public Facilities. HB 445 - DWI LAWS Testimony was presented by Dave Skidmore. SCS HB 445 (Finance) was REPORTED OUT of committee with a "do pass" recommendation, four zero fiscal notes and three notes containing funding (See page 6 of these minutes for a list of accompanying fiscal notes.) HB 456 - APPROP: COST OF CERTAIN LABOR AGREEMENTS HB 456am was REPORTED OUT of committee with a "do pass" recommendation. HB 466 - AHFC BONDS FOR UNIV. OF ALASKA USES Testimony was presented by Alison Elgee. Amendment No. 1 was proposed but failed to be adopted. HB 466am was subsequently REPORTED OUT of committee with zero fiscal notes from the Office of the Governor, Dept. of Revenue, and University of Alaska. HB 494 - ALASKA PENSION INVESTMENT AUTHORITY CSHB 494(STA)am was briefly brought before committee and then held pending return of Commissioner Rexwinkel to the meeting. HB 510 - APPROP: U OF AK LABOR AGREEMENT HB 510 was REPORTED OUT of committee with a "do pass" recommendation. HB 548 - ALASKA ORBITAL LAUNCH COMPLEX HB 548 was REPORTED OUT of committee with a "do pass" recommendation and zero fiscal note from the Dept. of Commerce and Economic Development. HOUSE BILL NO. 456 am An Act making appropriations to satisfy the agreed-upon monetary terms of certain collective bargaining agreements for certain public employees; and providing for an effective date. Co-chair Pearce directed that HB 456am be brought on for discussion and noted backup material consisting of the Senate companion bill (SB 289), Governor's transmittal letter, a hearing request, sectional analysis, and May 3, 1994, correspondence from the Dept. of Administration relating to the monetary terms of the contract. (Copies of all materials are on file in the original Senate Finance Committee file for HB 456.) (Co-chair Frank and Senator Jacko arrived at this time.) Senator Kerttula MOVED that HB 456am pass from committee with individual recommendations. No objection having been raised, HB 456am was REPORTED OUT of committee. Co-chairs Pearce and Frank and Senators Kelly, Kerttula, and Sharp signed the committee report with a "do pass" recommendation. Senator Jacko signed without recommendation. Senator Rieger was temporarily away from the committee table and did not sign the report. HOUSE BILL NO. 510 An Act making appropriations to satisfy the agreed-upon monetary terms of a collective bargaining agreement for certain employees of the University of Alaska; and providing for an effective date. Co-chair Pearce directed that HB 510 be brought on for discussion, noted that it relates to the labor agreement for the University of Alaska, and referenced file material consisting of the bill, Governor's transmittal letter, and a sectional analysis. She then called for questions from members. None were forthcoming. Senator Sharp MOVED that HB 510 pass from committee with individual recommendations. No objection having been raised, HB 510 was REPORTED OUT of committee. Co-chairs Frank and Pearce and Senators Kelly, Kerttula, and Sharp signed the committee report with a "do pass" recommendation. Senator Jacko signed without making a recommendation. Senator Rieger was temporarily absent from the meeting and did not sign. HOUSE BILL NO. 548 Act relating to the construction of the Alaska Orbital Launch Complex by the Alaska Aerospace Development Corporation. Co-chair Pearce directed that HB 548 be brought on for discussion. She explained that the companion Senate bill (SB 381) was previously reported out of committee and is now in Rules. The Senate version had a full committee hearing. She next referenced a zero fiscal note from the Dept. of Commerce and Economic Development, a picture of the launch stages, an artist's conception of the launch complex, information from the Alaska Aerospace Development Corporation, and assorted correspondence. The Co-chair then queried members regarding disposition of the bill. Senator Jacko MOVED that HB 548 pass from committee with individual recommendations. No objection having been raised, HB 548 was REPORTED OUT of committee with a zero fiscal note from the Dept. of Commerce and Economic Development. Co-chairs Frank and Pearce and Senators Jacko and Kelly signed the committee report with a "do pass" recommendation. Senators Kerttula, Rieger, and Sharp signed "no recommendation." CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 301(L&C) Act prohibiting the sale of certain studded tires or the sale of certain studs to be installed in tires; and providing for an effective date. Co-chair Pearce directed that CS SSHB 301 (L&C) be brought on for discussion and referenced a zero fiscal note from the Dept. of Transportation and Public Facilities, a sponsor statement, correspondence, a VTI study, and a study by the Dept. of Transportation and Public Facilities. She then queried members regarding disposition. Senator Sharp MOVED that CS SSHB 301 (L&C) pass from committee with individual recommendations. Senator Kerttula OBJECTED. Co-chair Pearce called for a show of hands, and the motion carried on a vote of 5 to 1. (Senator Kerttula was opposed to the motion, and Co-chair Frank was temporarily absent from the meeting.) CS SSHB 301 (L&C) was REPORTED OUT of committee with a zero fiscal note from the Dept. of Transportation and Public Facilities. Co-chair Pearce and Senators Kelly, Rieger, and Sharp signed the committee report with a "do pass" recommendation. Senator Kerttula signed "no rec." Senator Jacko signed without making a recommendation. CS FOR HOUSE BILL NO. 494(STA) am Act changing the Alaska State Pension Investment Board to the Alaska Pension Investment Authority and relating to the authority; and providing for an effective date. Co-chair Pearce directed that CSHB 494 (STA)am be brought on for discussion and referenced a Senate State Affairs version, a zero fiscal note from the Dept. of Administration (Retirement and Benefits), a $398.5 note from Dept. of Revenue (Treasury Management) with seven new positions, a $497.0 note from Dept. of Revenue (Alaska Pension Investment Board) with one new positions, an organizational chart, hearing request, sponsor statement, a sectional analysis, investment board position paper, and miscellaneous information. She observed that the bill had not before been heard by committee and asked that Darrel Rexwinkel, Commissioner, Dept. of Revenue, speak to the legislation. Commissioner Rexwinkel was absent from the meeting at this time. Co-chair Pearce directed that the bill be HELD pending his return. (Discussion did not revert to CSHB 494(STA)am during the balance of the meeting.) HOUSE BILL NO. 445 am An Act relating to administrative or court revocation of a driver's license resulting from operation of a motor vehicle, commercial motor vehicle, or aircraft; relating to chemical testing of a person's breath, urine, or blood if the person is involved in a motor vehicle accident that causes death or serious physical injury; relating to definitions applicable to commercial motor vehicle laws; relating to chemical testing of a person's breath, urine, or blood without the person's consent; and relating to the use in a civil or criminal action of the refusal of a person to submit to a chemical test. Co-chair Pearce directed that HB 445am be brought on for discussion. Co-chair Frank referenced two draft Senate Finance Committee Substitutes for the bill and explained that one contains reduction of the legal limit to .08 while the other does not. Versions "O" and "R" were distributed to members. DAVE SKIDMORE, aide to Senator Frank, came before committee to speak to differences between the Senate Judiciary version and the "O" draft of the proposed Senate Finance Committee Substitute. The Senate Finance draft: 1. Removes provisions which defined an individual's third or subsequent DWI conviction as a felony offense. 2. Inserts technical references to "commercial motor vehicles," at the request of the Dept. of Law and Dept. of Public Safety. 3. Makes a technical language change in Sec. 4, at the request of both the Dept. of Law and Dept. of Public Safety. 4. The blood-alcohol limited is reduced from 0.10 to 0.08. 5. Removes mandatory vehicle forfeiture provisions. 6. Directs the Dept. of Public Safety to conduct a study, during the interim, regarding mandatory vehicle forfeiture and application of felony penalties to certain drunk driving offenses. Mr. Skidmore reiterated that version "R" contains all provisions of version "O" with the exception of reduction of the blood-alcohol level. Co-chair Frank advised that discussions with the Dept. of Law and Dept. of Public Safety reached the conclusion that it is difficult and problematic to draft, in a short period of time, a forfeiture statute that would work effectively. More must be understood about the constitutional and legal hurdles that would have to be overcome. It was thus determined that the issue should become an interim project that could be dealt with next year. Senator Kelly voiced support for forfeiture provisions and advised of his understanding that forfeiture is used by the municipality of Anchorage. Senator Sharp also voiced support for forfeiture, noting that it is currently used to confiscate firearms and aircraft from individuals convicted of hunting violations. Co-chair Frank concurred in comments of support. He suggested that the legislation be accompanied by a letter of intent stating committee intent to construct forfeiture law for enactment next session. In response to questions from members, Mr. Skidmore referenced drafting problems encountered in attempting to deal with situations where there is other ownership or security interest in the vehicle. An additional problem arises from recent Supreme Court decisions that say vehicle forfeiture is analogous to a fine. There is disparity when individuals convicted of the same crime are forced to forfeit vehicles of differing values. Co-chair Frank MOVED for adoption of SCSHB 445 (Fin) (draft 8-GH2019\O, Ford, 5/6/94). Senator Kerttula OBJECTED. Co- chair Pearce called for a show of hands. SCSHB 445 (Fin), "O" version, was ADOPTED on a vote of 4 to 2. Senator Sharp asked if courts currently have authority to order forfeiture of a vehicle. Mr. Skidmore responded affirmatively, advising that it is discretionary. Directing attention to blood-alcohol provisions, Senator Rieger asked if the court differentiates between someone who is several points over the limit and an individual whose alcohol level is double. It was subsequently determined that courts have discretion in this area as well. Senator Rieger MOVED that SCSHB 445 (Finance) pass from committee with individual recommendations. No objection having been raised, SCSHB 445 (Finance) was REPORTED OUT of committee with the following fiscal notes: Alaska Court System 0 Dept. of Public Safety (Vehicles) 0 Dept. of Administration (OPA) 0 Dept. of Law 0 Dept. of Public Safety (Lab.) 49.6 Dept. of Administration (PDA) 90.9 Dept. of Corrections 248.7 opt. 313.8 rev. All committee members present signed the committee report with a "do pass" recommendation. (Senator Jacko was temporarily absent from the meeting and did not sign.) HOUSE BILL NO. 466 am An Act authorizing the issuance of bonds by the Alaska Housing Finance Corporation to pay for the costs of repair and rehabilitation of student housing facilities of the University of Alaska; authorizing the issuance of bonds by the University of Alaska to pay for the costs of repair and rehabilitation of facilities of the University of Alaska; amending powers of the Alaska Housing Finance Corporation; amending the definition of "public building"; relating to the Alaska debt retirement fund; and providing for an effective date. Co-chair Pearce directed that HB 466am be brought on for discussion. ALISON ELGEE, Budget Director, University of Alaska, came before committee. She explained that the legislation was introduced by the Governor on behalf of the University. It contains $75 million in bond authorization to deal with one-half of the University's identified deferred maintenance. A $30 million bond authorization through the Alaska Housing Finance Corporation addresses maintenance in student dormitories and housing, and $45 millions issued under the University will provide for other deferred maintenance projects. Ms. Elgee next referenced a listing of projects to be covered by the funding and noted the companion Senate bill (SB 304). Senator Kelly directed attention to Amendment No. 1 which he explained would provide funding for construction of new student housing facilities at the University of Alaska, Anchorage and University of Alaska, Southeast. Inclusion would require a title change. Senator Kelly then MOVED for adoption of Amendment No. 1. Co-chair Pearce OBJECTED. She explained that the committee already passed legislation allowing the University to "get private financing for student housing." The House removed provisions contained in the amendment from the proposed bill. Co-chair Pearce voiced concern that reinsertion of those provisions, at this time, would "kill the bill." She expressed a preference for a parking garage at the Anchorage campus. Senator Rieger inquired concerning need for construction at University of Alaska, Southeast. Alison Elgee explained that the $6 million would purchase an additional 129 beds. The project received planning and design money in the current fiscal year. It has been designed and is ready for construction. Student housing at both Anchorage and Juneau is completely occupied, and there is a waiting list. Co-chair Pearce called for a show of hands on adoption of Amendment No. 1. The motion failed on a vote of 2 to 4, and Amendment No. 1 was NOT ADOPTED. Senator Rieger acknowledged a substantial deferred maintenance problem at the University but voiced concern over use of reserves and issuance of additional debt. Senator Kelly pointed to the fact that Alaska's latest bond issue was rated AA by Wall Street. That indicates that Alaska is a good investment risk because of the state's low debt. He further attested to deferred maintenance needs within the University and voiced his belief that the board of regents has been irresponsible over the past decade in using funding for other things. Co-chair Pearce queried members on disposition of the bill. Senator Kelly MOVED that HB 466am pass from committee with individual recommendations. OBJECTION was voiced. The Co- chair called for a show of hands. The motion carried on a vote of 4 to 3, and HB 466am was REPORTED OUT of committee with zero fiscal notes from the Office of the Governor, University of Alaska, and Dept. of Revenue. Co-chairs Pearce and Frank and Senators Kelly and Sharp signed the committee report with a "do pass" recommendation. Senator Rieger signed "no recommendation." Senator Jacko signed, "do not pass." Senator Kerttula signed, "do not pass, use GFs." RECESS Co-chair Pearce acknowledged the impending Senate floor session and the fact that remaining bills on the agenda would require "some testimony." She then directed that the meeting be recessed and reconvened later in the day at the call of the chair. The meeting was recessed at 2:20 p.m.