Legislature(2001 - 2002)

04/25/2001 01:48 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 108                                                                                                            
                                                                                                                                
     "An   Act   relating   to   the   accounting   for   and                                                                   
     appropriation   of  fees   for  recording  and   related                                                                   
     services  by the  Department of  Natural Resources;  and                                                                   
     providing for an effective date."                                                                                          
                                                                                                                                
NICO  BUS,  ADMINISTRATIVE  SERVICES   MANAGER,  DIVISION  OF                                                                   
SUPPORT SERVICES,  DEPARTMENT OF NATURAL  RESOURCES testified                                                                   
in support of  the legislation. The legislation  would change                                                                   
the funding source  for the state recorder's  operations from                                                                   
program receipts to receipts supported  services. He observed                                                                   
that  HB  418 provided  authorization  for  use  of  customer                                                                   
receipts  to  support  their   programs.  He  emphasized  the                                                                   
difficulty  of the Recorder's  Office  to compete with  other                                                                   
programs  within the  Department  of Natural  Resources.  The                                                                   
Recorder's Office generates approximately  $4 million dollars                                                                   
in receipts.  The operating costs  for the Recorder's  Office                                                                   
is approximately $2.4 million dollars.                                                                                          
                                                                                                                                
Vice-Chair Bunde  questioned if  customers are being  charged                                                                   
too  much  if  revenues  generate   more  than  the  cost  of                                                                   
operations.  He added  that the  legislation  would take  the                                                                   
legislation  out  of  the  appropriation   process.  Mr.  Bus                                                                   
responded that  the change would  retain the requirement  for                                                                   
annual   legislative   authorization.   He   clarified   that                                                                   
recording is one  responsibility of the office  and archiving                                                                   
is  another.  There  are  many records  that  have  not  been                                                                   
archived.  Storage adds  to  the costs.  Municipalities  that                                                                   
have stored records  over the years are returning  books that                                                                   
must be  stored to  the state  of Alaska.  He noted  that the                                                                   
alternative is to close offices.                                                                                                
                                                                                                                                
Representative  Hudson noted  that there  are records  dating                                                                   
back  to the  1800's.  He spoke  in  support  of placing  the                                                                   
program under receipts supported services.                                                                                      
                                                                                                                                
In response  to a question  by Representative  Lancaster, Mr.                                                                   
Bus explained  that the  Palmer Office is  moving from  a 15-                                                                   
year  lease. The  increase  in population  over  the past  15                                                                   
years  has resulted  in an  overcrowded  facility. The  lease                                                                   
cost was  only .70  cents, since it  was negotiated  15 years                                                                   
ago. They  now have to pay  current market value.  The office                                                                   
requires more square footage at  increased cost. In addition,                                                                   
the  office has  inherited equipment  from  the Alaska  Court                                                                   
System  that has  no  maintenance agreements.  All  documents                                                                   
presented to the recorder's office  must be returned via mail                                                                   
to  the  customer.   Postal  fee  increases   have  added  to                                                                   
increased cost.                                                                                                                 
                                                                                                                                
Representative  Harris  noted that  there  are three  offices                                                                   
operated  by the  Alaska  Court  System: Seward,  Valdez  and                                                                   
Glennallen.  Court  activities   receive  priority  in  these                                                                   
offices. Mr. Bus  stressed the need to identify  personnel to                                                                   
fulfill this  function. The  Department of Natural  Resources                                                                   
operates the other 11 offices.                                                                                                  
                                                                                                                                
In response to  a question by Representative  Harris, Mr. Bus                                                                   
clarified  that  since  the  implementation  of  the  State's                                                                   
Recorder's  Office Index  System they  have provided  a daily                                                                   
on-line transfer index without missing a day.                                                                                   
                                                                                                                                
Vice-Chair Bunde  maintained that funding for  the Recorder's                                                                   
Office should be considered with  all other expenditures. Mr.                                                                   
Bus  responded that  detailed expenditures  are submitted  to                                                                   
the legislature.  Funds  are not dedicated  and must  receive                                                                   
legislative authorization.  The purpose  is to present  their                                                                   
true needs within  the competition of the  entire department.                                                                   
Co-Chair Mulder pointed  out that there is a  lot of activity                                                                   
in the Nome office, yet it was the first office cut.                                                                            
                                                                                                                                
Representative John Davies noted  that the fundamental policy                                                                   
question  is  should they  be  in  the category  of  receipts                                                                   
supported   services.  He  acknowledged   that  the   service                                                                   
generates  a lot  of fees  and the  customers are  frustrated                                                                   
because the service  cannot be advanced in  appropriate ways.                                                                   
The legislation would take away  the artificial cap issue and                                                                   
allow decisions to be based on the proper level of service.                                                                     
                                                                                                                                
Vice-Chair  Bunde   maintained  that   the  budget   for  the                                                                   
Recorder's Office would be increased  from $2.4 to $4 million                                                                   
dollars  by the  passage  of  the bill.  Representative  John                                                                   
Davies  argued  that  subcommittees would  still  review  the                                                                   
funding, but that the arbitrary cap would be removed.                                                                           
                                                                                                                                
Representative  Hudson stressed that  the change  would allow                                                                   
better bookkeeping.  Services would  be tied to  revenues. He                                                                   
pointed  out that  [under the  current  system] general  fund                                                                   
expenditures  are reduced to  an agency  that is earning  its                                                                   
own keep.                                                                                                                       
                                                                                                                                
Representative Whitaker  observed that the revenues  would be                                                                   
used to  provide better  service where  they are earned.  The                                                                   
legislation would provide a structural  change, by dedicating                                                                   
them to  the department where  they are produced.  He pointed                                                                   
out that the same  argument could be made in  the Division of                                                                   
Oil and  Gas and  expressed concern  that the dedication  may                                                                   
not be in the best interest [of the Legislature].                                                                               
                                                                                                                                
Mr.  Bus argued  that  workload is  directly  related to  the                                                                   
customer's action.                                                                                                              
                                                                                                                                
Representative  Harris spoke in  support of the  legislation.                                                                   
He  noted the  number of  complaints from  the public  sector                                                                   
regarding the  level of service. The Legislature  would still                                                                   
have  to approve  the  funds,  but it  would  not be  counted                                                                   
against  the  general  fund  component.  He  maintained  that                                                                   
accountability would continue  through the budgeting process.                                                                   
                                                                                                                                
Representative John  Davies argued that the  legislation does                                                                   
not create  a dedicated fund. He  felt that it is more  of an                                                                   
issue of  fund source: a  different type of program  receipt.                                                                   
It  would  be   a  sub  account  in  the  General   Fund  and                                                                   
expenditures would not be automatic.                                                                                            
                                                                                                                                
Representative Whitaker asked  if there is a current document                                                                   
backlog.  Mr. Bus  noted that  the statutes  require 24  hour                                                                   
indexing. The problem  occurs after the indexing.  There is a                                                                   
backlog  in archiving.  There are rooms  full of  information                                                                   
that  is not  available  to the  public  because  it must  be                                                                   
filmed  and  digitized.  He discussed  means  to  reduce  the                                                                   
backlog.                                                                                                                        
                                                                                                                                
Representative  Whitaker summarized that  there is  a backlog                                                                   
of work  that could  be solved with  an allocation  of funds.                                                                   
Mr.  Bus  observed  that capital  project  funding  has  been                                                                   
requested  for the  past several  years. The  funds have  not                                                                   
been sufficient  to keep up with  the level of  work. Capital                                                                   
requests  have been funded.  If the  legislation were  passed                                                                   
the level  of funding  would remain  at $2.5 million  dollars                                                                   
unless  the  court  offices  were  included.  The  Recorders'                                                                   
Office has  requested additional  operational funding,  which                                                                   
has not always been received.                                                                                                   
                                                                                                                                
Co-Chair Mulder  summarized that the issue differs  from past                                                                   
functions  because  it makes  more  money  than the  cost  of                                                                   
operations.  He expressed  confidence  that the  subcommittee                                                                   
chair would  watch expenditures  and added sympathy  for user                                                                   
groups that want a timely product for their fee.                                                                                
                                                                                                                                
Vice-Chair Bunde  maintained that the department  would still                                                                   
request additional  funds. He  argued against passage  of the                                                                   
legislation.                                                                                                                    
                                                                                                                                
Representative  Foster   MOVED  to  report  HB   108  out  of                                                                   
Committee  with  the  accompanying  fiscal  note.  Vice-Chair                                                                   
Bunde OBJECTED.                                                                                                                 
                                                                                                                                
A roll call vote was taken on  the motion to Move HB 108 from                                                                   
Committee.                                                                                                                      
                                                                                                                                
IN FAVOR: Davies,   Foster,    Harris,   Hudson,   Lancaster,                                                                   
          Whitaker, Croft, Williams, Mulder                                                                                     
OPPOSED: Bunde                                                                                                                  
                                                                                                                                
Representative Moses was absent from the vote.                                                                                  
                                                                                                                                
The MOTION PASSED (9-1).                                                                                                        
                                                                                                                                
HB  108  was REPORTED  out  of  Committee  with a  "do  pass"                                                                   
recommendation and with a previously  published fiscal impact                                                                   
note (#1) by the Department of Natural Resources.                                                                               

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