Legislature(2007 - 2008)HOUSE FINANCE 519
03/03/2008 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB72 | |
| HB200 | |
| HB413 | |
| HB326 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 3 | TELECONFERENCED | |
| += | HB 200 | TELECONFERENCED | |
| + | HB 326 | TELECONFERENCED | |
| + | HB 413 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 72 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
March 3, 2008
1:39 p.m.
CALL TO ORDER
Co-Chair Meyer called the House Finance Committee meeting to
order at 1:39:28 PM.
MEMBERS PRESENT
Representative Mike Chenault, Co-Chair
Representative Kevin Meyer, Co-Chair
Representative Bill Stoltze, Vice-Chair
Representative Harry Crawford
Representative Mike Hawker
Representative Reggie Joule
Representative Mike Kelly
Representative Mary Nelson
Representative Bill Thomas Jr.
MEMBERS ABSENT
Representative Les Gara
Representative John Harris
ALSO PRESENT
Tom Wright, Staff, Representative Mike Chenault; Bill
Rolfzen, Local Government Specialist, Department of
Commerce, Community and Economic Development; Suzanne
Armstrong, Staff, Representative Kevin Meyer; Representative
Nancy Dahlstrom; Eleanor Wolf, Staff, Senator Kurt Olson;
Pat Davidson, Legislative Auditor, Legislative Audit
Division, Legislative Affairs Agency; McHugh Pierre,
Legislative Liaison, Department of Military Affairs.
PRESENT VIA TELECONFERENCE
Chris Maisch, Director, Division of Forestry, Department of
Natural Resources; Michael Mitchell, Assistant Attorney
General, Department of Law.
SUMMARY
HB 200 "An Act relating to the presumption of coverage
for a workers' compensation claim for disability
as a result of certain diseases for certain
occupations."
CS HB 200(FIN) was REPORTED out of Committee with
a "do pass" recommendation and with new
indeterminate fiscal note by the Department of
Labor and Workforce Development and new
indeterminate fiscal note by the Department of
Administration.
HB 326 "An Act authorizing the governor to delegate to
the adjutant general the authority to order the
organized militia into active state service and
authorizing the payment of Alaska National Guard
called into active state service to fight
wildfires at rates of pay established for certain
emergency fire-fighting personnel; and providing
for an effective date."
HB 326 was HEARD and HELD in Committee for further
consideration.
HB 413 "An Act extending the termination date for the
Real Estate Commission; and providing for an
effective date."
HB 413 was REPORTED out of Committee with "no
recommendation" and new fiscal note by the
Department of Commerce, Community and Economic
Development.
CSSB 72(FIN)
"An Act relating to the community revenue sharing
program; and providing for an effective date."
HCS CSSB 72(FIN) was REPORTED out of Committee
with a "do pass" recommendation and with new zero
fiscal note by the Department of Natural
Resources, new fiscal note by the House Finance
Committee for the Department of Commerce,
Community and Economic Development, and new zero
fiscal note by the Department of Administration.
CS FOR SENATE BILL NO. 72(FIN)
"An Act relating to the community revenue sharing
program; and providing for an effective date."
Co-Chair Meyer reviewed that the Committee had previously
adopted Amendments #1 and #2, and had withdrawn Amendment
#3.
1:40:47 PM
Co-Chair Chenault MOVED to ADOPT Amendment #3.
Page 7, lines 11-13: Delete all material. Insert
"assembly approval. If there is more than one qualified
entity in an unincorporated community in a borough or
unified municipality, one of the entities may receive
the entire payment, or the payment may be shared
between two or more of the qualified entities, as
determined by the assembly.
(c) An unincorporated community in a borough or unified
municipality is eligible for a community revenue
sharing payment only if at least three of the following
services are generally available to all residents of
the unincorporated community and each of the three
services, in any combination, are provided by one of
more qualifying incorporated nonprofit entities or a
Native village council or are substantially paid for by
the residents of the unincorporated community through
taxes, charges, or assessments levied or authorized by
the borough or unified municipality:"
Vice-Chair Stoltze OBJECTED.
Co-Chair Chenault pointed out that in previous discussion
there had been question about which communities would be
eligible for the revenue sharing. The Department of
Commerce, Community and Economic Development (DCCED) worked
with staff to put together a list of potentially eligible
communities.
TOM WRIGHT, STAFF, REPRESENTATIVE MIKE CHENAULT, explained
the list submitted by DCCED ("The Estimated Potentially
Eligible Unincorporated Community List Under Proposed
Amendment #3," Copy on File). The 31 communities in bold
typeface are already represented and receiving payment from
the State under the current revenue-sharing plan. The list
also contains 55 communities that may or may not be eligible
to receive the revenue. Under the amendment, the borough
would determine if the criteria is met. The communities
accepted would be eligible for the $20,000 payment.
Co-Chair Meyer asked what the total potential cost would be.
Mr. Wright answered that if all 55 communities were
accepted, the cost would be an additional $1.1 million. He
expressed doubt that all the communities would be able to
meet the criteria.
Co-Chair Chenault explained that the seven criteria used
were on page 7 of the bill. The community would have to
provide a minimum of three of the seven. He reiterated that
the borough would determine if the criteria were met.
Vice-Chair Stoltze expressed concerns that some of the
smaller communities were analogous to large homeowners
associations that would become eligible for funds. He
wondered if the intent of revenue sharing would be met in
those situations.
1:46:43 PM
Representative Hawker thought the list of potential
communities was quantifiable. He added that the criteria
established in the amendment does not increase the funding
mechanism. He thought the amendment would promote the
desired outcome of having communities take responsibility
for providing public services. He supported the amendment.
Co-Chair Chenault listed distinct areas with their own
organized governance in his district.
Representative Thomas noticed Haines, a community in his
district, was on the list. He noted that Haines had a
different status as a consolidated borough and believed they
would get more than $20,000.
BILL ROLFZEN, LOCAL GOVERNMENT SPECIALIST, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, explained that
the list of unincorporated communities was taken from the
U.S. Census Bureau. The communities are not incorporated
cities but meet the definition of community. Haines was a
city for many years; when it consolidated with the Haines
Borough, the city government was dissolved. They are now
considered an unincorporated community within the Haines
Borough, which would make them eligible for the $20,000.
1:51:08 PM
Representative Thomas wondered if by consolidating
government, the community lost opportunity for revenue. Mr.
Rolfzen replied that the city of Haines would have received
a $75,000 base plus the per capita. Once the city dissolved
and consolidated with the Borough, eligibility changed to
$20,000. However, there were cost savings as a result of
streamlining government. Representative Thomas did not think
there was savings from unifying.
Vice-Chair Stoltze WITHDREW his OBJECTION.
There being NO OBJECTION, Amendment #3 was ADOPTED.
1:52:48 PM
Co-Chair Meyer MOVED to ADOPT Amendment #4.
Page 5, line 7: Delete "$50,000,000", Insert
"$60,000,000"; Page 5, line 9: Delete "$150,000,000",
Insert "$180,000,000"; Page 5, line 11: Delete
$50,000,000, Insert "$60,000,000"; Page 5, line 22:
Delete "50,000,000, divided by 50,000,000, plus one,
multiplied by 300,000", Insert "$60,000,000, divided by
60,000,000, plus one, multiplied by 384,000"; Page 6,
line 3: Delete "fifteenth", Insert "nineteenth"
Vice-Chair Stoltze OBJECTED for discussion purposes.
Co-Chair Meyer provided a general overview of Amendment #4.
The Governor had recommended $75 million for revenue sharing
but had only recommended a one-year solution. Senate Bill 72
recommends $50 million each year for three years. If the
price of oil stays above $60, 20% of that progressivity
amount will be added to the fund. Hopefully, the fund will
continue as long as oil prices stay high. Amendment #4
proposes a compromise of $60 million, higher than the $50
million recommended by the Senate but less than the
Governor's request of $75 million. The total for the three
years becomes $180 million.
SUZANNE ARMSTRONG, STAFF, REPRESENTATIVE KEVIN MEYER,
provided more detail regarding Amendment #4. Page 5, line 22
makes the adjustments to the formula and increases the
borough basic payment. The basic payments for the borough
will be $384,000; city reserves and unincorporated
communities inside boroughs and unincorporated communities
outside of boroughs will be based on $384,000 rather than
$300,000. Page 6, line 3 changes the factor by which the
basic payment for unincorporated communities inside the
boroughs will be calculated to one nineteenth instead of one
fifteenth to keep payments roughly at the $20,000 level.
Co-Chair Meyer added that the level jumps from $320 to $384
because of the floating base. As that amount goes up, so
does the base.
1:56:14 PM
Vice-Chair Stoltze sought clarification regarding the
changes in the numbers.
Representative Hawker queried Co-Chair Meyer's statement
regarding a "three-year program." Representative Hawker
surmised that the bill and the amendment would establish a
permanent and durable change of statute that would continue
to fund as long as oil prices remained above $60 per barrel.
Co-Chair Meyer clarified that the bill intends a three-year
minimum, but hoped it would last twenty years or more. He
acknowledged the fund was dependent on the price of oil. He
pointed out that if the price goes below $60, communities
would have time to make adjustments.
1:58:19 PM
Representative Kelly did not like the phrase "twenty or
thirty years." He said he would not object to the
amendments, but voiced his concerns regarding over-spending.
Representative Crawford referred to other bills that target
the progressivity funding source and wondered what would
happen if the Legislature passed two bills targeting the
same source. Co-Chair Meyer thought the bill Representative
Crawford was referring to would not be considered for a vote
of the people for another year.
Ms. Armstrong added that Amendment #1 added language to the
section dealing with progressivity. The bill would not limit
the Legislature's ability to appropriate General Fund money
or other revenue sources.
Vice-Chair Stoltze WITHDREW his OBJECTION. There being NO
further OBJECTION, Amendment #4 was ADOPTED.
2:00:57 PM
Representative Kelly restated concerns regarding
progressivity and how it would fund revenue sharing. He
thought that, allowing for budget growth, the State would
not have enough money without using all of the progressivity
revenue. He worried that the debate was not addressing the
difficulty of sustaining the payments to the municipalities.
He stated his intent to vote against the bill.
2:03:26 PM
Representative Hawker reiterated his concerns regarding the
State's inability to predict future revenue sharing. He was
reluctant to go forward with revenue sharing, but said there
were two reasons he could move forward with SB 72. First,
the self-limiting component in the bill says that if the
price or production of oil declines, the program would phase
itself out. Second, he thought the State's highest priority
should be putting wealth into the communities through
revenue sharing. He read the statement of purpose of the
Alaska Statehood Act, Section 6, which selected land and the
resource wealth "For the purposes of furthering the
development of and expansion of communities." Representative
Hawker thought the revenue sharing program reflected in SB
72 was exactly what the crafters of statehood wanted. He
stated his intention to support the bill.
2:07:02 PM
Representative Thomas talked about his experience serving on
a borough assembly during a time when revenue sharing was
lost. He supports revenue sharing with clear limits,
especially related to building infrastructure. He wants debt
retirement instead and would like to see limits placed on
how the municipalities spend the money.
Co-Chair Meyer agreed that it would be interesting to see
how communities would use the money. He expressed confidence
in the bill and encouraged movement.
2:09:50 PM
Representative Hawker acknowledged Representative Carl Moses
and thought the Act should be dedicated to him and his
"Never give up" legacy.
Representative Kelly stated that he supports revenue sharing
but wants to control the budget. He thought a policy call
would be needed regarding a state tax.
2:12:47 PM
Vice-Chair Stoltze MOVED to report HCS for CSSB 72 (FIN) out
of Committee with individual recommendations and with new
fiscal note by the House Finance Committee for the
Department of Commerce, Community and Economic Development,
new zero fiscal note by the Department of Administration,
and new zero fiscal note by the Department of Natural
Resources.
AT EASE: 2:13:42 PM
RECONVENED: 2:14:07 PM
Representative Kelly OBJECTED. A roll call vote was taken on
the motion.
IN FAVOR: Nelson, Stoltze, Thomas, Crawford, Hawker, Joule,
Meyer and Chenault
OPPOSED: Kelly
Representative Harris and Representative Gara were absent
from the vote.
The MOTION PASSED (8/1).
HCS CSSB 72(FIN) was REPORTED out of Committee with a "do
pass" recommendation and with new zero fiscal note by the
Department of Natural Resources, new fiscal note by the
House Finance Committee for the Department of Commerce,
Community and Economic Development, and new zero fiscal note
by the Department of Administration.
HOUSE BILL NO. 200
"An Act relating to the presumption of coverage for a
workers' compensation claim for disability as a result
of certain diseases for certain occupations."
2:16:27 PM
Co-Chair Meyer MOVED to ADOPT Amendment #1, 25-LS0748\M.4,
Bailey, 2/28/08 (Copy on File).
Vice-Chair Stoltze OBJECTED.
Ms. Armstrong explained that Amendment #1 removes the
section that provides a presumption for contagious diseases,
requires annual exams for the first seven years of
employment, and clarifies that the seven years of
firefighting service must take place in Alaska. Co-Chair
Meyer added that many states do not cover infectious
diseases. Ms. Armstrong elaborated that a review of the
statutes of other states revealed that infections diseases
are being added.
2:19:57 PM
Ms. Armstrong reported that the Alaska Municipal League
Joint Insurance Association (AMLJIA), which covers
municipalities, supports the amendment because it narrows
down the class of people covered under HB 200. Previously,
the bill would have covered fire firefighters, peace
officers, emergency medical and rescue personnel as well as
others, making it a large group. Co-Chair Meyer referenced
the letter from AMLJIA (Copy on File).
REPRESENTATIVE NANCY DAHLSTROM, SPONSOR, spoke to the bill.
She preferred the original version of HB 200, but was
willing to support the amendment in the interest of moving
the bill forward. She thought future studies would show that
the cost for covering a broader range of workers is less
than some believe, but understood that the change was a
policy call of the present Legislature. Representative
Hawker shared Representative Dahlstrom's view and thought
the bill, though compromised, was acceptable. Co-Chair Meyer
concurred.
Vice-Chair Stoltze stated that he preferred the original
bill and was unhappy that AMLJIA was not present.
2:23:44 PM
Representative Thomas commented that the Committee could
vote the amendment down and have AMLJIA come to work further
on the bill. He agreed with Representative Stotlz that they
should be present for the discussion.
Ms. Armstrong stated for the record that Amendment #1 was
not brought forward by AMLJIA.
Vice-Chair Stoltze WITHDREW his OBJECTION. There being no
further OBJECTION, Amendment #1 was ADOPTED.
2:26:08 PM
Representative Kelly advocated for other workers with
dangerous jobs and stated his concern with protecting only
certain groups. He said he would not be supporting the bill.
Co-Chair Meyer referred to indeterminate fiscal notes. Vice-
Chair Stoltze wondered if the amendment changed the nature
of the fiscal notes.
2:29:38 PM
Representative Nelson stated for the record that she thought
it very unfair that another indeterminate fiscal note
attached to a minority bill protecting families had not been
acceptable. She asserted that the indeterminate notes
attached to HB 200 should be treated in the same manner. Co-
Chair Meyer thought the note attached to HB 200 was truly
indeterminate as the diseases could not be predicted,
whereas the other note could be quantified.
Representative Nelson stressed that she does not have a
problem with the bill, but protested the double standards
shown in the Committee regarding fiscal notes. Co-Chair
Meyer said there was no intent to favor one bill over
another.
Co-Chair Chenault concurred. He wanted to see indeterminate
fiscal notes dealt with better. He promised Representative
Nelson to look more closely at all indeterminate notes. He
thought HB 200 was unusual and had few risks.
2:33:36 PM
Vice-Chair Stoltze MOVED to report CS HB 200(FIN) out of
Committee with individual recommendations and with new
indeterminate fiscal note by the Department of Labor and
Workforce Development and new indeterminate fiscal note by
the Department of Administration. There being NO OBJECTION,
it was so ordered.
CS HB 200(FIN) was REPORTED out of Committee with a "do
pass" recommendation and with new indeterminate fiscal note
by the Department of Labor and Workforce Development and new
indeterminate fiscal note by the Department of
Administration.
2:35:26 PM
HOUSE BILL NO. 413
"An Act extending the termination date for the Real
Estate Commission; and providing for an effective
date."
ELEANOR WOLF, STAFF, SENATOR KURT OLSON, explained that the
bill extends the sunset date for the Real Estate Commission.
Co-Chair Meyer mentioned the zero fiscal note by the
Department of Commerce, Community and Economic Development.
Representative Hawker commented on the audit (Copy on File),
particularly the Commissioner's letter recommending a fee
analysis.
2:37:52 PM
PAT DAVIDSON, LEGISLATIVE AUDITOR, LEGISLATIVE AUDIT
DIVISION, LEGISLATIVE AFFAIRS AGENCY, related that the fee
analysis had been conducted. The Department had been failing
to clear out their credit card suspense account. After
recalculating, Legislative Audit found the Board no longer
showed a deficit. Representative Hawker asked for
clarification regarding the failure to clear the credit card
account. Ms. Davidson replied that over the last couple
years the Division has expanded the ability to pay with
credit cards. There were receipts of $475,000 from the real
estate web site, which would have cleared the deficit.
During the next audit this will be looked at.
Representative Hawker characterized the operations of the
Department in losing track of $500,000 of public funds as
serious neglect. Ms. Davidson agreed that this is a risk
area of accountability. She explained that the funds
remained in the State's control, but were not properly
allocated. She became aware of the failure only after the
audit. Until Legislative Audit gets into the next sunsets,
she won't have a clear view of where the failure occurred.
Representative Hawker did not think the issue should be
addressed in the Finance Committee.
Ms. Davidson said the Department's response will be to look
at this issue during the next audit. She said the Committee
was free to request a direct audit.
2:43:25 PM
Co-Chair Meyer commented that the issue requires further
attention. Representative Hawker said he would be contacting
the chair of the Labor and Commerce Committee regarding
oversight hearings.
2:44:10 PM
Vice-Chair Stoltze MOVED to report HB 413 out of Committee
with individual recommendations and with new fiscal note by
the Department of Commerce, Community and Economic
Development. There being NO OBJECTION, it was so ordered.
HB 413 was REPORTED out of Committee with "no
recommendation" and new fiscal note by the Department of
Commerce, Community and Economic Development.
2:45:02 PM
HOUSE BILL NO. 326
"An Act authorizing the governor to delegate to the
adjutant general the authority to order the organized
militia into active state service and authorizing the
payment of Alaska National Guard called into active
state service to fight wildfires at rates of pay
established for certain emergency fire-fighting
personnel; and providing for an effective date."
MCHUGH PIERRE, LEGISLATIVE LIAISON, DEPARTMENT OF MILITARY
AND VETERANS AFFAIRS (DMVA), explained that HB 326 came
about when the Department realized that fire fighters,
organized through the Department of Natural Resources, were
getting paid federal rates, while National Guard members
working as fire fighters were being paid at the state active
duty rate, as much as 75% less. Statute prohibited the
disparity from being corrected; HB 326 will rectify that. In
addition, the bill allows the Governor to delegate
activation of the National Guard for wildfire fighting
purposes in times of emergency.
Representative Thomas asked if payment would be retroactive.
Mr. Pierre said it was not retroactive, but would begin
immediately. Representative Thomas shared a personal
experience. He questioned why a civilian would be paid the
same as a military person. Mr. Pierre replied that the pay
will be equitable for all working on the fire line.
Representative Kelly voiced concern about the costs. He
wondered if this was a unique situation. Mr. Pierre replied
that fire fighting would be the exception for National Guard
members.
2:50:20 PM
CHRIS MAISCH, DIRECTOR, DIVISION OF FORESTRY, DEPARTMENT OF
NATURAL RESOURCES (DNR) (Testified via teleconference),
testified in support of HB 326. He explained that the
National Guard has only been used four times in the history
of the Division of Forestry (DOF) fire fighting. When Guard
members are not on active duty, they are paid their regular
salary. He said the issue was equal pay for equal work. He
described the Guard's duties.
Mr. Maisch commented on the zero fiscal note. Use of the
National Guard for fire fighting has been infrequent and
cannot be predicted.
Representative Kelly asked about rate of pay and the
assumption that there are several levels of firefighting
classes. He wondered if the Guard would come in at the
lowest class as they are not trained fire fighters. Mr.
Maisch explained the classification system (Copy on File).
Representative Kelly noted his support for the bill.
2:54:23 PM
Mr. Pierre added that the National Guard is only activated
for the specific task they are trained for, usually the
helicopter and crew members.
2:55:19 PM
PUBLIC TESTIMONY CLOSED.
Co-Chair Meyer MOVED to ADOPT Amendment #1, (Copy on File).
Page 1, line 2: Delete "wildfire", Insert "wildland
fire"; Page 1, line 3: Delete "wildfire", Insert
"wildland fire"; Page 1, line 5: Delete "wildfire",
Insert "wildland fire"; Page 1, line 11: Delete
"wildfire", Insert "wildland fire"; Page 2, line 13:
Delete "wildfire", Insert "wildland fire"; Page 2, line
15: Delete "wildfire", Insert "wildland fire"; Page 2,
line 16: Delete all material and insert: "wildland
fire" includes the uncontrolled burning of grass,
brush, timber, and other natural vegetative material.";
Page 2, line 24: Delete "wildfire", Insert "wildland
fire"; Page 3, lines 9-10: (2) "wildland fire" includes
the uncontrolled burning of grass, brush, timber, and
other natural vegetative material."
Vice-Chair Stoltze OBJECTED.
Mr. Pierre explained the effort to change the definition to
"wildland fire."
MICHAEL MITCHELL, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF
LAW (Testified via teleconference), explained Amendment #1.
The term "wildland fire" is the modern terminology and would
make the language consistent with other statute.
2:57:22 PM
Vice-Chair Stoltze WITHDREW his OBJECTION. There being NO
further OBJECTION, Amendment #1 was ADOPTED.
Co-Chair Meyer introduced the fiscal notes.
Representative Hawker said he would like to see both fiscal
notes revised. He asked for clarification on the costs. Mr.
Pierre explained that DMVA expects zero cost because DNR
reimburses DMVA for real time use of equipment and man-
hours. However, other expenses may be incurred, such as
equipment damages. Representative Hawker thought the other
expenses would exist regardless of what members of the Guard
were paid. Mr. Pierre agreed.
Representative Hawker maintained that proper policy and
procedure had not been followed regarding the fiscal notes.
He appreciated the indeterminate nature of the situation,
but wanted to see the fiscal note cleared up with zeros on
the lines that should have zeros, in order to quantify the
State's exposure.
3:00:57 PM
Representative Hawker turned to the DNR fiscal note and said
the fiscal note does not explain adequately the possible
costs, as the components are known.
Mr. Maisch said the formula of who pays is complicated and
different for each fire. He gave a more detailed analysis:
· In 2004, helicopters flew about 258 hours; the cost to
DOF was about $649,000. The Guard was mobilized twice
in 2004 for a total of 50 days, the most they have been
used.
· In 2002, the cost to the Division was $177,000.
· In 2007, the cost to the Division was $147,000.
· The funds come out of the activity component of the
Division budget. The activity component is funded as a
ten-year average each year and currently is $13
million. A supplemental request during the fire
fighting season augments the account.
· At the end of the year, there is a cross-billing with
the federal partners to sort out the actual funds owed
to each agency.
3:04:56 PM
Representative Hawker wanted to see the information
encapsulated in the fiscal note. Mr. Maisch said the
information had been submitted in "DNR Comments" (Copy on
File).
Mr. Pierre said he could get the information for DMVA.
HB 326 was HEARD and HELD in Committee for further
consideration.
3:08:14 PM
ADJOURNMENT
The meeting was adjourned at 3:08 PM.
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