Legislature(1993 - 1994)
1993-01-15 House Journal
Full Journal pdf1993-01-15 House Journal Page 0075 HB 65 HOUSE BILL NO. 65 by the House Rules Committee by request of the Governor, entitled: "An Act relating to the improvement of state finances through reduction of operating costs of certain state agencies and establishment of certain fees; and providing for an effective date." was read the first time and referred to the Labor & Commerce, State Affairs, Judiciary and Finance Committees. The following fiscal notes apply: Fiscal notes (2), Dept. of Environmental Conservation, 1/15/93 Fiscal notes (2), Department of Health & Social Services, 1/15/93 Fiscal note, Dept. of Labor, 1/15/93 Fiscal note, Dept. of Natural Resources, 1/15/93 Fiscal note, Dept. of Public Safety, 1/15/93 Fiscal note, Dept. of Administration, 1/15/93 Revenue note (2), Dept. of Education, 1/15/93 Revenue note (2), Dept. of Labor, 1/15/93 Revenue note, Dept. of Public Safety, 1/15/93 Zero fiscal notes (3), Dept. of Administration, 1/15/93 Zero fiscal note, Dept. of Labor, 1/15/93 Zero fiscal note, Dept. of Revenue, 1/15/93 The Governor's transmittal letter, dated January 15, 1993, appears below: "Dear Speaker Barnes: Under the authority of art. III, sec. 18, of the Alaska Constitution, I am transmitting a bill relating to the improvement of state finances by reducing costs in the operations of certain state agencies and authorizing state agencies to defray a greater portion of their costs through the imposition of fees. A section-by-section description of this bill follows. Sections 1 - 32 of the bill authorize biennial renewal of liquor licenses by the Alcoholic Beverage Control Board. Under this bill, all liquor licenses that are now issued for a one-year period would be issued for a two-year period. As a result of the transitional procedures in sec. 71 1993-01-15 House Journal Page 0076 HB 65 of the bill, each year only one-half of the licenses would be subject to renewal. The board's staff now labors under a staggering amount of renewal-related work. The effect of the bill would be to spread that workload. Sections 33 - 35, 49, 64, and 70 (repealer of AS13.26.410(b)) relate to the duties of the Office of Public Advocacy. The bill proposes to delete certain functions of the Office of Public Advocacy (OPA) that are considered to be duplicative of services provided by other agencies or that are not constitutionally mandated. Due to the increase in child- in-need-of-aid cases, it is crucial that the many abused and neglected children receive priority in OPA appointments. Sections 33 - 35 of the bill would allow the Department of Administration to determine a schedule of reasonable fees for the costs of providing public guardians. The Office of Public Advocacy would be allowed to assess these fees against the estate or income of a ward or protected person for whom a guardian has been appointed, based on the financial ability on the ward or protected person to pay these costs. Currently, no fees may be assessed against any person receiving the benefit of a public guardian except upon approval by a court. This process is cumbersome and expensive for the Office of Public Advocacy, which must pay for the costs of a court hearing, including the costs of counsel for both sides. These changes would simplify the procedure for recouping some of these costs, and would provide for consistent application of the fee schedule, while allowing an exemption forwards or protected persons who are not financially able to pay the fees. Section 49 of the bill would amend AS25.24.310 to delete the requirement that OPA provide guardian ad litem representation in certain child custody proceedings. Currently, the Alaska court system has personnel denoted as "custody investigators" who perform essentially the same function as OPA in custody proceedings. Section 64 of the bill would amend AS44.21.410(a), regarding the powers and duties of OPA, to correspond to the amendments made by secs. 33 - 35 of the bill. Additionally, this section would eliminate the requirement that OPA provide free attorney representation to parents whose children are involved in the disposition phase of delinquency proceedings, and the requirement of free representation in cases 1993-01-15 House Journal Page 0077 HB 65 involving adoption of a minor, a petition to remove the disabilities of a minor, or a commitment proceeding involving a minor. Section 69 of the bill would delete the requirement that OPA represent minors in commitment proceedings, to correspond to one of the amendments to AS44.21.410(a)(4) made by sec. 64 of the bill. Section 70 would repeal AS13.26.410(b), for consistency with the amendments proposed by secs. 33 - 35. After the effective date of the sections relating to OPA in this bill, OPA would not accept new appointments for the types of cases deleted from OPA's mandate by the bill. However, OPA would continue to represent those parties in cases to which OPA was appointed before the bill's effective date. Sections 36 - 38 would authorize the Alaska Commission on Postsecondary Education to assess a one percent guarantee fee on student loan awards made under the Scholarship Loan Program, effective July 1, 1994. These fees would be deposited into a loan guarantee fee account within the student loan fund and would be used to offset losses incurred due to student loan debt cancellation necessitated by death, disability, or bankruptcy of the student. The current statute does not allow security to be required for a loan and strictly limits the use of loan proceeds. These amendments also would provide that the loan guarantee fee be added to the loan award so that students would receive the full amount of money requested, up to the maximums set out in AS14.43.110 and 14.43.115, to pay for their educations. Sections 39 - 43 would authorize the same one percent loan guarantee fee to be assessed on loans under the Memorial Scholarship Loan Program, the Teacher Scholarship Loan Program, and the Family Education Loan Program. As a result, all of the student loan programs would assess a one percent loan guarantee fee on the amount of the loan awarded. Section 44 would establish in the Department of Labor the authority to set reasonable fees by regulation for administering special inspector examinations and processing applications for special boiler and pressure vessel inspector commissions. Currently the department does 1993-01-15 House Journal Page 0078 HB 65 not charge a fee for processing these applications for administering the examinations. Section 45 would eliminate the requirement in AS18.62.020 that certificates of fitness for plumbers and electricians be valid for either a one-year or a three-year period. Under the bill, the Department of Labor would have the authority to set a time period in regulation for the certificates. This should increase the department's efficiency in processing applications for these certificates and stabilize program receipts. Section 46 would eliminate the current statute's prescribed certificate of fitness fees for plumbers and electricians, and instead would establish authority in the Department of Labor to set reasonable fees by regulation. See AS18.62.030. This section would also allow the department to charge a fee for duplicate certificates. These changes would enable the department to set fees for certificates of fitness in line with the actual costs incurred in issuing them, and would authorize the department to recoup expenses incurred in issuing 100 - 150 duplicate certificates each year. Section 47 is a revenue-generating measure that would permit the Alaska Police Standards Council to adopt regulations to collect reasonable fees for processing applications for state certification of police and correctional officers and instructors who are employed by non-state agencies. Section 48 would raise the required fee for filing an application for an employment agency permit under AS23.15.390 from $10 to $100. This higher amount reflects the costs of the review done by the Department of Labor for these permits. Sections 50 - 57 would amend AS28 (motor vehicles) to enhance revenue through increased motor vehicle fees or to correct technical problems in the motor vehicle laws to increase the efficiency of the Department of Public Safety. Section 50 would delete the phrase "vehicle register" in AS28.10.071(a), which no longer is meaningful in light of current computer technology. In addition, this section would clarify the authority of the department to adopt regulations to recover the state's 1993-01-15 House Journal Page 0079 HB 65 costs in generating computerized vehicle registration lists. Section 51 would amend AS28.10.181(c) to permit the issuance of special request license plates depicting Alaska wildlife and other images of life in Alaska. This change would produce revenue through the issuance of these special request plates. Section 52 changes the eligibility for free vehicle registration and license plates for disabled persons by adopting the definition of limited or impaired ability to walk that appears in a federal regulation (23C.F.R. 1235.2). The special license plate allows the holder to have special consideration for designated parking for the disabled. The existing statute (AS28.10.181(d)) allows a person with at least a 70 percent disability or medical handicap to obtain vehicle registration at no charge, and, through the free special license plates, to use the designated parking even though the person may not have a disability that affects walking. The new definition would provide for free vehicle registration and license plates to those most in need of special parking. The department should receive additional revenue from vehicle registration fees and the sale of regular license plates to those who no longer qualify under AS28.10.181(d). Section 53 clarifies an ambiguity in AS28.10.181(j) by explicitly requiring that car dealers use two dealer plates on each vehicle permitted to have dealer plates (all license plates are issued in pairs). The somewhat confusing language of the existing statute has allowed some dealers to split a pair of plates between two vehicles. The Department of Public Safety should receive increased revenue through the sale of additional plates to dealers. Sections 54 and 58, and the repeal of AS28.10.011(12) in sec. 70, together make clear that mobile homes are not considered "vehicles" for purposes of administering motor vehicle laws. Under the changes made by these sections, the Department of Public Safety, division of motor vehicles, will no longer provide registration and motor vehicle titles for mobile homes. Section 55 would clarify that senior citizens are entitled to free vehicle registration of only one vehicle once each calendar year. This change is needed in order to avoid significant difficulties and administrative costs encountered in maintaining proper registration when senior 1993-01-15 House Journal Page 0080 HB 65 citizens buy, sell, or trade vehicles during the year and claim free registration on more than one vehicle during the year. Section 56 provides an additional registration fee of $10 for vehicle registration not done by mail. This section would provide an incentive for people to use the mail for vehicle registration. This should alleviate some of the delays that most people are encountering at division of motor vehicle field offices and allow DPS staff to function more efficiently. This section also allows the department to adopt regulations to waive the additional fee in appropriate circumstances. Section 57 would clarify AS28.10.421(c) by requiring that companies and businesses that register vehicles in their company or business name must pay commercial registration fees, and cannot avoid paying those fees by claiming that the vehicle is not used for commercial purposes. Section 59 exempts money that the state receives for administering the group insurance programs established under AS39.30.090 (primarily health insurance programs) from the definition of "program receipts" in AS37.05.146. This change will result in accounting efficiencies being saved in the Department of Administration's ongoing operations and cost-savings to the state. Sections 60 and 61 of the bill amend AS37.05.289, the State Insurance Catastrophe Reserve Account (Account), by providing that payments to the state of insurance claim settlement money and money received by the state as recovery for losses, are to be deposited directly into the Account (which is in the general fund). Presently, such money that is received by the division of risk management must be credited to the general fund and is appropriated to the state agency to which the payment is related. The United States Department of Health & Human Services' division of cost allocation has determined that certain insurance recovery money must be returned to the Account (from which federally funded state agencies have been charged premiums through division of risk management "Cost of Risk" allocations). The federal government demands that a portion of such insurance recoveries be refunded to the appropriate federal program. By allowing for insurance settlement and claims recovery money to be deposited directly into the state insurance catastrophe reserve account, future premium assessments are expected to be reduced and the state 1993-01-15 House Journal Page 0081 HB 65 will be in compliance with federal cost allocation standards. An appropriation would still be required before expenditure of money in that account. Additionally, the new procedures should reduce the considerable accounting required with the present system. Section 62 would clarify the authority of the Department of Natural Resources to accept cash or other donations to support the system of state parks and recreational facilities. Section 63 would expand the authority of the Department of Natural Resources to collect reasonable fees for services provided in state parks. It would add several new categories of park fees, including sale of firewood, sale of park-related merchandise, entrance fee into visitor centers and historic sites, sale of plans and graphic materials, day use fees, and fees for park-related programs. The bill, in sec. 71, also would set a temporary fee schedule for certain of these services, to be used until the Department of Natural Resources sets the fees by regulation. In the fourth year of a phased implementation schedule, these new fees are expected to raise around $400,000. Sections 65 and 66 of the bill would amend, and add a new subsection to, AS44.46.025 to provide the Department of Environmental Conservation (DEC) with increased authority to charge fees to offset the direct costs of various programs designed to avoid and rectify pollution, to ensure healthy and safe public facilities, and to assist business in complying with local, state, and federal environmental standards. An existing statute presently limits DEC's authority to charge fees to certain enumerated subject areas, and further limits DEC's fee authority to specified services related to those subjects. Thus, DEC may charge a fee to reflect the costs associated with the issuance of a permit for a hazardous waste facility, but may not charge a fee when a permit is not issued (either because the application is withdrawn or a permit is determined not to be necessary), even though DEC incurs costs in reviewing the application. This results in the permitted facilities shouldering an inequitably large share of the cost of the hazardous waste management program. Section 65 would rectify this problem in several ways. First, it would amend the introductory clause of AS44.46.025(a), to allow DEC to charge fees for any services relating to the programs listed in (a), not just the underinclusive listing of activities now set out in the law. This 1993-01-15 House Journal Page 0082 HB 65 amendment recognizes that DEC employs methods other than permits and inspections in its activities. Second, through sec. 65, the itemized list of programs in the subsection would be modified and expanded, to allow the DEC to charge fees reflecting the direct costs of: (1) management of hazardous waste, not just permitting costs; (2) approvals of sites for hazardous waste management facilities; (3) control of solid waste facilities, and permits for those facilities, including wetlands permits (assuming state assumption of the wetlands permitting process that is currently handled by the United States Army Corps of Engineers); (4) reviews of sewage and industrial waste disposal or treatment plans; (5) oversight of the application of pesticides and broadcast chemicals; (6) inspection, testing, or other regulation of a wider variety of service facilities; (7) certification of private laboratories that will conduct a variety of environmental analyses for profit; (8) state testing for and issuance of certificates of inspection for motor vehicles; (9) certification of federal permits or authorizations under the federal Clean Water Act; and (10) filing of information with the Alaska State Emergency Response Commission. Section 66 would revise the existing fee language relating to the air quality permit program, removing it from AS44.46.025(a) and placing it in a new subsec. (c) of AS44.46.025. This new subsection authorizes DEC to set fees for program services to cover indirect costs of the program, as well as direct costs. This change is incorporated in the bill because air quality permit program fees must reflect both indirect and direct costs to meet requirements of the federal Clean Air Act. Section 67 would amend AS47.07.020(b) to add a new category of persons to the state's optional list of those eligible for federal Medicaid coverage. Through the amendment, the state could claim federal matching money for medical costs now paid entirely from state money. Children under age 21 who are eligible for adoption assistance under AS25.23.190 - 25.23.220 because of special medical or rehabilitative needs would be added to the optional Medicaid-eligible list under this provision. 1993-01-15 House Journal Page 0083 HB 65 Section 68 would amend AS47.07.035, which lists the order of priority in which groups eligible under the optional Medicaid program will be eliminated from Medicaid coverage when there are insufficient appropriations to cover all optional services and groups. This bill would add, as para. (28) in this list, persons under age 21 who are eligible for adoption assistance due to special medical or rehabilitative needs. Placement of this group as number 28 would mean that this group would be the last to be eliminated for Medicaid coverage in the event of a shortfall of appropriations. Section 70 repeals certain provisions of Alaska law. AS13.26.410(b) would be repealed to make a necessary conforming amendment to facilitate the collection of fees by OPA as set out in secs. 33 - 35 of this bill. AS28.10.011(12) is repealed to remove a reference to mobile homes from AS28, as described earlier in this letter. AS28.10.181(k) is repealed to allow the Department of Public Safety (DPS) to no longer register vehicles that are only occasionally used on a highway. This repeal should reduce the workload for DPS, as well. AS28.22.011(a)(3) is repealed to make a technical amendment to mandatory motor vehicle insurance to conform to the repeal of AS28.10.181(k), relating to occasional used vehicles. Finally, AS37.05.210(1) is repealed to remove the statutory requirement for the Department of Administration to make monthly and annual reports on the financial condition and transactions of funds in the state accounting system. The department currently prepares these reports by computer on a more frequent basis. The repeal would leave intact the Department of Administration's responsibility to file a year-end report on the financial condition of the state, including financial transactions from the preceding fiscal year. Section 73 would give transitional authority to allow state agencies to begin the process to adopt regulations as soon as the bill is signed into law, so long as the new regulations do not become effective before the respective effective dates of the relevant sections of this bill. Section 74 of this bill would give this section an immediate effective date. Section 74 also would provide an immediate effective date for the transitional sections related to temporary fees in state parks and staggered expiration of licenses issued by the Alcoholic Beverage Control Board. 1993-01-15 House Journal Page 0084 HB 65 Section 75 would provide a July 1, 1993 effective date for the majority of sections of the bill to coincide with the start of state fiscal year 1994. Section 76 would provide an effective date of December 31, 1993 to allow a uniform date for the changing from annual to biennial licenses issued by the Alcoholic Beverage Control Board. Section 77 would give secs. 36 - 43 of this bill an effective date of July 1, 1994 to allow the Alaska Commission on Postsecondary Education to institute the uniform fee assessment for the 1994 - 1995 academic year. I urge your favorable consideration of this bill. Sincerely, /s/ Walter J. Hickel Governor"