SENATE STATE AFFAIRS COMMITTEE March 18, 1997 3:37 p.m. MEMBERS PRESENT Senator Lyda Green, Chairman Senator Jerry Ward, Vice-Chairman Senator Jerry Mackie Senator Jim Duncan MEMBERS ABSENT Senator Mike Miller COMMITTEE CALENDAR SENATE CONCURRENT RESOLUTION NO. 7 Relating to the thirty-first annual Boys' State. -- MOVED SCR 7 OUT OF COMMITTEE SENATE CONCURRENT RESOLUTION NO. 8 Relating to the twenty-ninth annual Girls' State. -- MOVED SCR 8 OUT OF COMMITTEE HOUSE CONCURRENT RESOLUTION NO. 8 Creating the Deferred Maintenance Task Force. -- MOVED HCR 8 OUT OF COMMITTEE SENATE BILL NO. 87 "An Act relating to regulation of architects, engineers, and land surveyors; extending the termination date of the State Board of Registration for Architects, Engineers, and Land Surveyors; and providing for an effective date." -- MOVED CSSB 87(STA) OUT OF COMMITTEE SENATE JOINT RESOLUTION NO. 22 Inviting the United States Department of Defense to select Alaska as the site to base and train military troops. -- MOVED SJR 22 OUT OF COMMITTEE SENATE BILL NO. 105 "An Act relating to legislative ethics; relating to the filing of disclosures by certain legislative employees and officials; and providing for an effective date." -- HEARD AND HELD SENATE BILL NO. 21 "An Act relating to ferries and ferry terminals, establishing the Alaska Marine Highway Authority, and relating to maintenance of state marine vessels; and providing for an effective date." -- AMENDED AND HELD PREVIOUS SENATE COMMITTEE ACTION SCR 7 - See Senate State Affairs minutes dated 3/18/97. SCR 8 - See Senate State Affairs minutes dated 3/18/97. HCR 8 - See Senate State Affairs minutes dated 3/18/97. SB 87 - See Labor and Commerce Committee minutes dated 3/11/97 and State Affairs minutes dated 3/18/97. SJR 22 - See Senate State Affairs minutes dated 3/18/97. SB 105 - See State Affairs minutes dated 3/11/97, 3/13/97, 3/18/97 and 3/25/97. SB 21 - See Senate Transportation Committee minutes dated 2/18/97 and 3/6/97 and Senate State Affairs minutes dated 3/18/97 and 3/25/97. WITNESS REGISTER Ms. Lorali Meier, Legislative Intern to Senator Loren Leman State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Presented overview on SCR 7 & SCR 8 Mike Heatwole, Staff to Representative Gail Phillips State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Presented overview on HCR 8 Jack Kreinheder, Senior Policy Analyst Office of Management & Budget Office of the Governor P.O. Box 110020 Juneau, AK 99811-0020 POSITION STATEMENT: Testified in support of HCR 8 Ms. Annette Kreitzer, Staff to Senate Labor & Commerce Committee State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Explained amendment to SB 87 Chris Nelson, Staff to Senator Robin Taylor State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Offered information on SJR 22 Ben Brown, Staff to Senator Tim Kelly State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Offered information on SB 105 Senator Robin Taylor State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Prime Sponsor of SB 21 Ms. Andrea Barkley P.O. Box 1037 Ward Cove, AK 99928 POSITION STATEMENT: Testified in support of SB 21 Doug Ward P.O. Box 7552 Ketchikan, AK 99901 POSITION STATEMENT: Testified in support of SB 21 Sam Kito, Special Assistant to Commissioner Perkins Department of Transportation & Public Facilities 3132 Channel Drive Juneau, AK 99801-7898 POSITION STATEMENT: Testified in opposition to SB 21 ACTION NARRATIVE TAPE 97-12, SIDE A Number 001  SCR 7 THIRTY-FIRST ANNUAL BOYS' STATE   SCR 8 TWENTY-NINTH ANNUAL GIRLS' STATE  CHAIRMAN GREEN called the Senate State Affairs Committee to order at 3:37 p.m. and brought up SCR 7 and SCR 8 as the first order of business before the committee. Number 015 LORALI MEIER , a legislative intern in the office of Senator Loren Leman, explained Boys' State and Girls' State are week-long programs that provide high schools with the knowledge of state and local governments. SCR 7 and SCR 8 recognize the importance of state and local, public and private involvement in these programs in order to make them successful. Because SCR 7 and SCR 8 encourage young men and young women to be leaders, Senator Leman believes these exceptional programs deserve the recognition and support of the Legislature. Number 034 SENATOR MACKIE moved that SCR 7 and SCR 8 be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 045 HCR 8 DEFERRED MAINTENANCE TASK FORCE  CHAIRMAN GREEN brought HCR 8 before the committee as the next order of business. MIKE HEATWOLE , staff to Representative Gail Phillips, sponsor of HCR 8, which would create a deferred maintenance task force, read the following sponsor's statement into the record. "Deferred maintenance is the result of years of unmet maintenance on Alaska's public facilities. Meeting our maintenance needs is not about building a skywalk from the court to the capitol. It is a about a capitol building that leaks. It is about docks that are rotting and falling into harbors, and it is about an infrastructure that needs repair. Some cost estimates place Alaska's unmet maintenance needs at well over $1 billion, and some are even closer to $2 billion. HCR 8 will establish a legislative task force to make recommendations to the Governor and the Legislature on how to address Alaska's unmet maintenance needs. The task force will be made up of five members from the House and five members from the Senate. The Speaker of the House and the President of the Senate will also serve as non-voting members of the task force. The task force will be specifically charged with: - reviewing and evaluating existing reports and publications about deferred maintenance recommendations previously made - identifying and evaluating all current and deferred maintenance needs - soliciting public comment about this topic - submitting a report of its findings and recommendations to the Governor and Legislature by the convening of the regular session - forwarding recommendations about funding all deferred maintenance needs The task force will begin work as soon as members are appointed." Mr. Heatwole informed the committee that Representative Phillips has personally spoken with the Governor about this task force, and he agrees with the concept. He has personally pledged his support from his office and from his commissioners on the task force. Further, the formation of the task force has received support from the truckers, contractors, laborers and many concerned Alaskans. Number 095 JACK KREINHEDER , Senior Policy Analyst, Office of Management & Budget, voiced the Administration's support of HCR 8 because they believe the task force is something that is needed; deferred maintenance is a serious problem that needs to be addressed. Mr. Kreinheder said the Administration would endorse expanding the scope of duties of the task force to address not only deferred maintenance but new facilities and other capital funding. It is their concern that while deferred maintenance is important, that if this task force only looks at that aspect of the problem, it would be overlooking some of the other needs of the state. He added that his impression is that Representative Phillips is amenable to that idea. Mr. Kreinheder related that in addition to broadening the scope of the task force to cover those issues, the Administration believes the task force should also address the issue of ongoing maintenance of state facilities. He said it doesn't help to come up with a funding solution or solutions to the backlog of deferred maintenance if we continue to add to our deferred maintenance each year by short-funding the necessary ongoing maintenance of state facilities. He added that it is something the Administration has also attempted to deal with, but found very difficult given the present budget constraints. Number 145 SENATOR WARD asked if the language in the resolution didn't already enable the task force to do what Mr. Kreinheder was suggesting without making any changes. MR. KREINHEDER acknowledged that it is not prohibited by the resolution, but he said he doesn't see anything in it that addresses anything other than deferred maintenance. He added that if the intent of the Legislature is clear and there's agreement among all parties that the scope of work is appropriate for the task force, then it is probably okay, but he thinks the Administration's preference would be to address it specifically. Number 170 SENATOR DUNCAN asked how the Administration comes up with these projects for which they request deferred maintenance dollars. MR. KREINHEDER explained there has been a prioritization process established for deferred maintenance that identifies the highest priorities needs. In general, the needs that affect health, life and safety are the ones that tend to rise to the top. SENATOR DUNCAN commented it is clear that identifying deferred maintenance is important, but it is not something that we haven't been doing in this state. However, he said the real issue is not identifying the needs because the agencies have already identified them, but identifying how they are going to be funded, and that's what the major emphasis of the task force should be instead of spending their time reinventing the wheel. MR. KREINHEDER agreed with his comments and said he would envision this task force spending a great deal of its time on how to finance these deferred maintenance and other capital needs. He also pointed out that in his six-year capital plan, the Governor has proposed using general fund bond issues to address the state's capital needs, and that's something they think would be appropriately addressed by this task force as well. Number 225 SENATOR DUNCAN asked Mr. Heatwole if he was satisfied that the language in the resolution really directs the task force towards the major task of identifying funding sources and ways to fund the deferred maintenance needs in this state. MR. HEATWOLE replied that it is their understanding that the reports relating to deferred maintenance needs do exist and they should be relatively quick to compile, and that the real work of the task force is to identify ways to address funding concerns. The speaker is satisfied with the language in the resolution, and they have already begun to compile a file to forward to the task force as soon as it is established. Number 250 SENATOR MACKIE said he has introduced SB 37 that deals not only with deferred maintenance of schools, but with new facilities as well, and he doesn't read anything in the resolution that would allow this task force to address those needs, other than deferred maintenance. He asked if Representative Phillips would have any objection to expanding this to deferred maintenance and new facility needs because there are a couple of significant proposals that are before the Legislature dealing with deferred maintenance as well as new construction. MR. HEATWOLE responded that question was something he would have to take back to Representative Phillips. Number 295 There being no further testimony on HCR 8, CHAIRMAN GREEN asked for the will of the committee. SENATOR WARD moved HCR 8 be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 300  SB 87 ARCHITECTS, ENGINEERS & SURVEYORS CHAIRMAN GREEN brought SB 87 before the committee as the next order of business. It was noted there was a proposed State Affairs CS for the committee's consideration. SENATOR MACKIE moved CSSB 87(STA) be adopted. Hearing no objection, CHAIRMAN GREEN stated the committee substitute was adopted as a working document. ANNETTE KREITZER , staff to the Senate Labor & Commerce Committee, explained the change in the State Affairs CS from what passed out of the Labor & Commerce Committee appears in Sections 6 & 7. It was an amendment that was proposed in the Labor & Commerce Committee, but they did not have all the consensus from all parties involved who wanted to comment on the proposed amendment. It basically provides that land surveyors can be registered to teach in an institution of higher learning. She noted the land surveyors have sought this amendment. Number 335 There being no further testimony on CSSB 87(STA) CHAIRMAN GREEN asked for the pleasure of the committee. SENATOR MACKIE moved CSSB 87(STA) and the attached fiscal note be passed out of committee with individual recommendations. Hearing no objection, it was so ordered.  SJR 22 ALASKA MILITARY BASES  CHAIRMAN GREEN announced SJR 22 was before the committee for its consideration. Number 345 CHRIS NELSON , staff to Senator Robin Taylor, explained the Department of Defense is currently conducting what is now known as the Quadrennial Defense Review, which addresses all aspects of military policy, and it is looking at opportunities for expansion as well as some cuts that might be made. The resolution directs the attention of the Department of Defense to the opportunities for using Alaska's bases for military training, and the fact that Alaska's bases are modern, up-to-date, and under-utilized. CHAIRMAN GREEN asked for the pleasure of committee on SJR 22. SENATOR WARD moved SJR 22 be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. SB 105 LEGISLATIVE ETHICS CODE REFORM  CHAIRMAN GREEN brought SB 105 back before the committee. She directed attention to a proposed amendment which would include the Executive Ethics Act in SB 105. SENATOR WARD moved the adoption of Amendment No. 2, which would add the Executive Ethics Act to SB 105. SENATOR MACKIE objected. SENATOR MACKIE commented that last year's ethics bill didn't make it through the process so he is concerned with what was contained in that bill that members may have had an objection to. He said he thinks SB 105 is a good bill as currently written, and he would appreciate some committee time to sit down with the drafter and staff from the Ethics Committee and go through each one of the changes so everyone fully understands what it does. BEN BROWN , staff to Senator Kelly, assured Senator Mackie that the amendment would only put the executive branch under an ethics code very similar to the one the Legislature currently exists under, but the prime difference being the Personnel Board would play the role that the Ethics Committee plays in the legislative branch. He also clarified that last year's legislation passed the Senate unanimously, but it was the offering of an amendment that dealt with the legislative side of things in the House Finance Committee that ended up tripping the bill up in the final stages of the session, the most controversial of those amendments being a ban on spousal lobbying. SENATOR MACKIE asked if it was the Chair's intent to adopt this one amendment and move the bill out, and CHAIRMAN GREEN acknowledged that was correct. SENATOR MACKIE then removed his objection to the amendment and SENATOR DUNCAN objected, stating he doesn't believe the committee should be adopting a 27-page amendment without having an opportunity to go through and review it. Number 485 Following brief discussion, CHAIRMAN GREEN stated SB 105 would be held over to the Thursday, March 20 meeting. Number 500  SB 21 ALASKA MARINE HIGHWAY AUTHORITY  CHAIRMAN GREEN brought SB 21 before the committee as the final order of business. SENATOR ROBIN TAYLOR , prime sponsor of SB 21, read the following sponsor statement into the record: "SB 21 will establish the Alaska Marine Highway Authority to assume management of the Marine Highway System from the Department of Transportation & Public Facilities. "The Authority would be a public corporation of the state as an instrumentality of DOT/PF, but would have a legal existence independent and separate from the state. The new Authority would be comparable to the Alaska Housing Finance Corporation or the Alaska Industrial Development and Export Authority. However, it is different from the Alaska Railroad Board; it would not own its own assets, and would not be able to be self sufficient. "Establishment of such an authority boards would bring maritime experience and continuity to the management of the Alaska Marine Highway System. "Based on information gathered at public hearing over the interim, the Senate Task Force on the Alaska Marine Highway System concluded that the legislature should consider the creation of such an Authority. "Testimony received by the Task Force indicated that DOT management of the marine highway lacks focus and that AMHS administration under DOT lacks maritime experience. "Management under DOT has become insular and is unresponsive to input from vessel employees and the general public. Scheduling is chaotic and the fare structure has discouraged ridership. The reservations system has been an abject failure. "While concerns over funding levels are valid, the naturally bureaucratic mind-set of the Department has tightened what former director Jim Ayers termed a "death spiral". "Establishment of the Alaska Marine Highway Authority will not be a panacea, but will give the system a new perspective. It will also give it some history and background in maritime management, which it does not have now, as well as it will provide an opportunity for some major changes that will all to the benefit of the system itself, the legislature and the people of Alaska." Number 515 SENATOR TAYLOR directed attention to two proposed amendments to SB 21. He explained the first amendment would tighten up the designation of the maritime union representative by providing that the union representative would be a representative of the largest number of onboard employees in the authority. It also makes certain the commissioner of DOT would not end up being the chairman of the board. SENATOR MACKIE commented that IBU would be the representative of the largest number of onboard employees, and he questioned why the representation was being limited to one particular union. SENATOR TAYLOR replied that there is another union seat available, and it was just felt that at least one seat ought to represent the majority of the employees. He added he is trying to get as much balance to the board so that it will work effectively. Number 565 SENATOR TAYLOR , addressing the second amendment, explained the governor would be appointing the members to the board, with the exception of the commissioner of DOT, and it was felt that those six members should stand for confirmation before the Legislature. However, before confirmation can be required, the directors must have a quasi-judicial function about them. The amendment accomplishes that purpose by providing that the authority may adopt regulations. SENATOR MACKIE asked why these board members would have to be confirmed if he is trying to come up with something comparable to AIDEA and AHFC. SENATOR TAYLOR responded this is to address a concern that the makeup of the board could easily be stacked. TAPE 97-12, SIDE B Number 555 SENATOR WARD moved adoption of the following Amendment No. 1. Hearing no objection, CHAIRMAN GREEN stated the amendment was adopted. Amendment No. 1 Page 1, line 13: Delete "a maritime union" Insert "the maritime union representing the largest number of onboard employees of the authority" Page 3, lines 3 - 4: Delete "their number" Insert "the appointed directors" SENATOR WARD moved adoption of the following Amendment No. 2. Hearing no objection, CHAIRMAN GREEN stated the amendment was adopted. Amendment No. 2 Page 2, line 8: Delete "members" and insert "directors" Page 2, line 9: Following "affairs." insert "The appointed directors are subject to confirmation by a majority of the members of the legislature in joint session" Page 2, line 10: Delete "members" and insert "directors" Page 4, following line 13 insert new paragraph (10) to read: "(10)" adopt regulations under AS 44.62 (Administrative Procedure Act) governing (A) access to and use of services and facilities of the authority; (B) the authority of the officers and crew of vessels of the authority to maintain peace and order as necessary to protect the health, safety, and public welfare of the patrons and employees of the authority; (C) rates, tariffs, and other charges for transportation and other services provided by the authority;" Renumber the following paragraphs accordingly. Page 4, line 16: Delete all material. Renumber the following paragraph accordingly. Number 560 SENATOR DUNCAN asked how this authority, since it going to be autonomous, is going to work with the budget process. SENATOR TAYLOR said he believes it will work just as the current one works. The board, itself, or its executive director, will appear before committees of the Legislature, they will submit a proposed budget and that budget will be adjusted up or down as the Legislature sees fit. He said he doesn't see a dramatic change in the process, but he thinks its good to be concerned about whether or not that authority would continue to have the level of support from the executive branch. SENATOR DUNCAN said that was his concern, that the more autonomous we make it, what type of support does it lose from the executive branch for the operational side of the budget, as well as the commissioner of DOT is going to have pressure from the highway side to provide a majority of the federal highway funds to highways and not the Marine Highway System because it is no longer his responsibility. He asked Senator Taylor if he had any fear that all of a sudden the Marine Highway System will take a real back seat as far as funding necessary improvements, renovations, maintenance, etc. SENATOR TAYLOR answered he didn't think it could do much worse. He noted the state of Washington intentionally makes certain that they don't have any of the federal highway funds mixed in, and, as a consequence, they then can dictate that their boats will be repaired only in Puget Sound yards. He said he thinks it helps the commissioner to the extent that he now has a more autonomous group arguing with probably better credibility than what current staff is able to argue. Number 445 SENATOR MACKIE said he supports the concept of the board membership having representation of people that work on the ferries, because he thinks a lot of the information that's readily available from people that actually work on the ships is not being currently utilized to make it a better system. However, he questioned if conflict of interest problems could arise by a couple of members sitting on the board making decisions over working conditions, contracts, or other kinds of things that actually affect them. SENATOR TAYLOR replied that with seven members on this board, he doesn't believe it is going to be a problem. He added that he is trying to place members out of this fleet into direct control of this operation because he believes they want to keep the system going. SENATOR MACKIE noted there is less service now than there was six years ago, the public is paying more than they were years ago, the Legislature is appropriating less general funds, etc., and he asked what kind of money does he think is going to be saved in switching to this kind of management, and how are we going to be able to improve service. SENATOR TAYLOR replied he believes that though there will be an initial transition cost and start up cost, if a higher level of maritime experience were involved in management and if management would reduce itself in size to where it was comparable to other maritime operations, that there would be significant savings. Those savings could then be put into further service out in the fleet. Number 350 CHAIRMAN GREEN stated testimony would be taken from individuals waiting to testify over the teleconference network. ANDREA BARKLEY , an employee of the Alaska Marine Highway System testifying from Ketchikan, said she has just come from a meeting with Commissioner Perkins and Gary Haden, and the crews on the Marine Highway System were able to submit three more alternatives for possible fleet deployment. She said she believes Commissioner Perkins is interested in solving some of the problems, but she is not sure if, even through this administrative process, he would be able to do it himself. Ms. Barkley said the Executive Committee of the Inland Boatmen's Union has passed a resolution in support of SB 21. She also voiced her support for the two amendments adopted by the committee. Concluding, Ms. Barkley said she hopes the perception in the Legislature is not that the system is so broken that it must be thrown in the garbage can, because that is not the case. The crews on the Marine Highway System really love their jobs, and that's why they care so much and wish to see it survive and to prosper. She said they have an administrative problem and they need to be able to change the way that they are administrated. Number 298 DOUG WARD , Project Manager of Alaska Ship & Drydock, the current operators of the state-owned Ketchikan Shipyard, spoke in support of an amendment adopted in the Senate Transportation Committee, which added the interport differential, and which is designed to level the playing field for Alaska shipyards in competitive bids situations with out-of-state shipyards. The amendment only asks that the state consider all of the costs that go into transporting a vessel, and it brings fairness to the evaluation process in how the interport differential is used in evaluating a bid. It does not change how the state currently conducts its bidding practices. All it does is request a full accounting of the interport costs to make a more fair evaluation process. Number 250 SAM KITO , Special Assistant to Commissioner Perkins, Department of Transportation & Public Facilities, read a summary of a prepared statement that was read into the record by Commissioner Perkins in the Senate Transportation Committee. (See Senate Transportation minutes dated March 6, 1997) Mr. Kito, speaking to interport differential provision that was added in the Transportation Committee, said the department is concerned that the interport differential costs potentially could cost the Marine Highway System. A recent AIDEA report estimates that the cost to perform work on the vessels in Ketchikan was on the average 20 percent higher than outside the state. Using that 20 percent number the system believes it could face an additional $500,000 annually in costs for work at the Ketchikan shipyard. Also, this change will increase the cost that the Marine Highway System will not be able to receive reimbursement for under a federal project. Number 148 There being no further testimony on SB 21, CHAIRMAN GREEN stated it was her intention to hold the bill and schedule it for another hearing on Thursday, March 20. She then adjourned the meeting at 5:07 p.m.